Damn Taxes!

What's up guys! I'm new to BHW and would really like to meet new people and help out as much as possible. I have a couple of questions to those of you who knows self employment taxes. I doing online marketing full time and always did my own taxes and made a decent amount of money when I had a 9-5 and always owed taxes. What did I do? Paid the goverment monthly installments with stiff penalties! I extended my taxes I made last year and will see an accountant sometime in October.

- After advertising I net about 2K a week. Living in RI and married how much taxes do you think I would have to pay on that 2K? This will be 1 year with this business and the numbers stayed the same.

- I didn't register my business because I was laid off and time flies (no excuses) but should I go LLC or
S Corp. I will be just running the business.

Any advice what kind of accountants I should get or avoid?

Many thanks!!!

Jimmy L said:

What's up guys! I'm new to BHW and would really like to meet new people and help out as much as possible. I have a couple of questions to those of you who knows self employment taxes. I doing online marketing full time and always did my own taxes and made a decent amount of money when I had a 9-5 and always owed taxes. What did I do? Paid the goverment monthly installments with stiff penalties! I extended my taxes I made last year and will see an accountant sometime in October.

- After advertising I net about 2K a week. Living in RI and married how much taxes do you think I would have to pay on that 2K? This will be 1 year with this business and the numbers stayed the same.

- I didn't register my business because I was laid off and time flies (no excuses) but should I go LLC or
S Corp. I will be just running the business.

Any advice what kind of accountants I should get or avoid?

Many thanks!!!

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I'm not an accountant. If you been averaging 2K a week net for the year that would be about 16K your owe in taxes. I'm not sure weekly but once you register a business you will pay quarterly taxes which would be about 4K every quarter in your case. I would recommend going the LLC route since it's only you. Again, my numbers could be off. Anyways congrats on those numbers... very good business!

FormerBoxer said:

I'm not an accountant. If you been averaging 2K a week net for the year that would be about 16K your owe in taxes. I'm not sure weekly but once you register a business you will pay quarterly taxes which would be about 4K every quarter in your case. I would recommend going the LLC route since it's only you. Again, my numbers could be off. Anyways congrats on those numbers... very good business!

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Thank you! Looks like I'm going to pay a lot of penalties come October because I can't give all that money. I think it will be easier once I pay quarterly taxes. I'm trying to buy a home next year and my business is growing so hopefully I can get my taxes squared away and keep growing. Any accountant advice? Who to avoid or what to look for?

First of all, LLC. I cant remember the reasons why but its what you want to do if youre working for yourself, basically.

Im in the same boat for taxes though I'm not making anywhere close to 2k a week. Coming up on a year doing this full time and I billed a total of 4k in August, I believe. I havent paid any taxes yet... I probably need to

Dont do your own taxes unless you are a pro at it. Dont let turbo tax decide what you qualify for and what you cant expense.

Depending on your exemptions (children, mortgage, health ins, etc), you shouldnt have to pay a whole lot.

Especially since you have business expenses, a good tax pro will help you save alot of money. Start looking for a serious tax professional.

Tax advantages and disadvantages of LLC:
https://www.thebalance.com/what-are-the-tax-advantages-and-disadvantages-of-an-llc-397768

OG Mike said:

Dont do your own taxes unless you are a pro at it. Dont let turbo tax decide what you qualify for and what you cant expense.

Depending on your exemptions (children, mortgage, health ins, etc), you shouldnt have to pay a whole lot.

Especially since you have business expenses, a good tax pro will help you save alot of money. Start looking for a serious tax professional.

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Thanks! Yeah, I'm going to search for a tax accountant. Do any tax accountants do online marketing (dumb question I know) or should I look for someone who is familiar with one. Also, I have 1 child and my wife has the health insurance. I don't want to DEDUCT much because I want to show the bank a good profit to buy a home hopefully.

Jimmy L said:

Thanks! Yeah, I'm going to search for a tax accountant. Do any tax accountants do online marketing (dumb question I know) or should I look for someone who is familiar with one. Also, I have 1 child and my wife has the health insurance. I don't want to DEDUCT much because I want to show the bank a good profit to buy a home hopefully.

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Business is business. A tax pro will know what to do regardless of what kind of business it is. Online marketing is basically a "service" business, so your taxes will be approached that way. It's worth it to check around with a few friends and family and see who they use. You don't necessarily need an "accountant." Just someone who is savvy and has experience doing taxes. Once you find someone you like, your going to use him/her for years.

By the way, if you don't have health insurance, you're going to end up paying a penalty tax for not having it. Look into that now.

As far as showing income for a home... this is a very slippery slope. Obviously, if you don't have a home, tax returns may come into play in deciding if you make enough to pay your mortgage. So, you may end up paying more taxes the year(s) prior to buying a home just so you can qualify. Once you get the home purchase out of the way, you can deduct property taxes, etc. If you are making the money, look into buying a home as your first investment. There are so many upsides to it. The only downside is all the maintenance you have to do to keep it looking good. Too much to add here so Ill keep it short and end here.

umerjutt00 said:

Tax advantages and disadvantages of LLC:
https://www.thebalance.com/what-are-the-tax-advantages-and-disadvantages-of-an-llc-397768

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Be careful with corporations and LLCs. Depending on the State you live, you may have to pay additional fees and taxes for them that just don't make sense.