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A couple of noob tax questions

Discussion in 'Business & Tax Advice' started by Swordude, Jul 2, 2014.

  1. Swordude

    Swordude Regular Member

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    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!
     
  2. thehoots

    thehoots Newbie

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    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!
     
  3. burnett4congress

    burnett4congress Jr. VIP Jr. VIP Premium Member

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    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.
     
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  4. sampath

    sampath Regular Member

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

    spmcnerd Regular Member

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    #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.
     
  6. taxhit

    taxhit Junior Member

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    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.
     
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  7. Swordude

    Swordude Regular Member

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    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.
     
  8. ming34

    ming34 Regular Member

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    consult an accountant as rules are different in different countries
     
  9. AnthonyCorleone

    AnthonyCorleone Jr. VIP Jr. VIP

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    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