A couple of noob tax questions

So this is the first year I've really made decent money from IM (nothing spectacular, but let's just say more than 10K). I've set about 25% aside for taxes, but I'm wondering if that's enough. I am married and my wife and I both work full-time. I was looking at the tax brackets on Forbes and we fall into the 15% bracket when adding up all IM money and money from our jobs.

My two questions:
1. Should I be fine putting away 25% of my IM earnings to cover taxes?
2. Do I need to pay State taxes on IM earnings? All of the earnings came in from either ClickBank or PayPal.

I realize the best route would be to speak with a tax expert, and I plan to closer to the end of the year, but I'm hoping someone has a little bit of insight in the meantime -- just so I don't end up with tons of money owed in taxes and I'm sitting there with my 25% (although I plan to have more money saved by then for other reasons).

Also, I normally do our taxes online with TurboTax.

Any help is appreciated, thanks!

I would say this sort of question needs some more specifics if you are willing to mention them, but hell, I am no accountant.

What state did you file your business in and what "type" of business are we talkin' here? C-Corp? Sole proprietor?

Congratulations on the earnings BTW!

1, Probably. You shouldn't be paying much at all in taxes on your IM earnings if you do it right considering you are already in the 15% bracket.
2, Yes. The state doesn't care where the payment comes from - it's your income and you are a taxpayer in that state.

It is good to consult a tax expert before it is late.
congrats on your earnings !

#1 YES! I'm so proud of you I'm gona punch my son's lights out when he gets home.
#2 My state has sales tax 8.25x $1.00. This would come off at sale and is separate from Income Tax Feds.
Every 1/4 year I have to tally up what I took in for Sales Tax and send to state/comptrollers.
If you are in sales tax bracket people like Amazon will charge at checkout and pay it.

Swordude said:

So this is the first year I've really made decent money from IM (nothing spectacular, but let's just say more than 10K). I've set about 25% aside for taxes, but I'm wondering if that's enough. I am married and my wife and I both work full-time. I was looking at the tax brackets on Forbes and we fall into the 15% bracket when adding up all IM money and money from our jobs.

My two questions:
1. Should I be fine putting away 25% of my IM earnings to cover taxes?
2. Do I need to pay State taxes on IM earnings? All of the earnings came in from either ClickBank or PayPal.

I realize the best route would be to speak with a tax expert, and I plan to closer to the end of the year, but I'm hoping someone has a little bit of insight in the meantime -- just so I don't end up with tons of money owed in taxes and I'm sitting there with my 25% (although I plan to have more money saved by then for other reasons).

Also, I normally do our taxes online with TurboTax.

Any help is appreciated, thanks!

Click to expand...

I am a tax accountant so maybe I can help a little.

1. Hard to say if 25% is enough without knowing more about your financial details. However, just know that if you are in the 15% marginal tax bracket you will owe this amount plus 15.3% for self employment tax on your net (income less expenses) IM earnings. So in summary you will owe 30.3% on your net IM earnings for federal income tax purposes.

2. Yes, your state will tax your IM earnings. However, they will not assess a self employment tax like federal.

taxhit said:

I am a tax accountant so maybe I can help a little.

1. Hard to say if 25% is enough without knowing more about your financial details. However, just know that if you are in the 15% marginal tax bracket you will owe this amount plus 15.3% for self employment tax on your net (income less expenses) IM earnings. So in summary you will owe 30.3% on your net IM earnings for federal income tax purposes.

2. Yes, your state will tax your IM earnings. However, they will not assess a self employment tax like federal.

Click to expand...

Okay, that makes sense. One thing I forgot to mention is that I haven't applied for any type of business ownership/LLC -- is this something I need to do this year? Like I said, I haven't really had any earnings from ClickBank up until a few months ago, so I hadn't considered any of this.

consult an accountant as rules are different in different countries

1) tax rate % depends on your state some states have additional taxes I pay 40% and this is consider cheapest and lucky rate
2) for last year taxes I just finally was able to pay them of and due to I delay over 4 months after deadline I got 5% extra to pay for every month i delay so over 15k$ extra had to pay cuz im few month late

3) i hire my wife + expert agency on tax to handle my $ as im totally have no time on that but i suggest you do the same and don't go with famous fuckers like H&R Block as they will rip u off and look more for someone who run such business as family business and not famous organizations in this industry as they will help u 10x more then any famous agency and same time is much much cheaper as they most of the time don't go based on you amount of $ unlike H&R Block quote me 20k$ to handle my tax what a f#gs

to be honest if ur income is from IM the worst about this is to leave in US and make money of IM because all other country's ask only 5-15% and uk 25% while US 40% + additional taxes and by the end of the day is over 50% in taxes u pay

try writhe thinks off everything u can writhe it off and always try pay in time to don't get audited the more attention u bring on ur self the more chances you will get audited