I'm actually dealing with this same issue. I have money set aside to pay taxes, I'm just not sure how to do it. I'm an LLC so do I pay taxes when I transfer the funds out of my LLC account into my personal account? How is your business registered?
You have to file a return for the LLC too. You need to find a way to either hide or use your income to lower your tax burden.
You still have to file a return for it. The tax liability may pass on to your personal return (I don't know, for sure), but if the LLC profits, it is part of your net income and therefore, taxable. I'm an S Corp. I file a return for the business; but the income (profit or loss) flows onto my personal return, where I actually pay the taxes each year. If you don't know about any of this, I'd REALLY contact an accountant right away. I only pay about $500/year to my accountant and she takes care of the returns, gives me advice on reducing taxes, etc. These are basic questions an accountant could answer very easily.
If you make money you have to pay taxes, if you a lot of expenses to run that business you can use them as deductions, but like Lorien said you'd best contact an accountant to make sure you do things by the book if you arn't sure.
I've been saving money for taxes since my first check, which is the proper thing to do unless you are a established business.
How much do you guys save? I'm sole proprietor I save 42% (35% federal, 7% CA state tax) Am I doing correctly?
42% is about as high as it will go. You will prob see that you saved too much . I've been trying to save but I got a little behind lol. My accountant is getting everything back on track though.
U don't file for a LLC, but the money you make passes on to you so you pay it I pay quarterly for what I made last year, kinda just starting to save this month for what I made with YPN
my cpa told me that I don't have to pay quarterly.. even if I'm late, he said he could tweak it make it without penalty.. so I'm saving 42% for taxes.. I'll probably be paying next year February or something.. I'm getting $$$ back on entire tutition, textbooks, hosting fees.. Yay !! couple 10k's there
You need to contact an accountant and possible a lawyer. Depending on how your LLC was setup you pay taxes in one fo two ways. Either the income of the LLC is passed down to an individual or group of individuals and you pay taxes as if its all personal income, like you would in a sole proprietorship or partnership. The alternative is you pay corporate taxes on the income of the LLC, and you deduct any employee pay (including your own) from the LLC income, then seperately file personal income tax on your personal income that is paid by your company.
My accountant told me I need to go LLC but I thought a S-Corp was better since I was making so much and the dividend that the S-Corp would pay to me is only taxed Fed and State with no SS ect. I elected the LLC cause they advised it but now I have to pay quarterly taxes for the LLC and pay tax on anything I take from the LLC itself. I would like to hear from you guys which way you have done this to avoid the most taxes you have to pay. What have you done and what are the pros and cons of doing so. PGZ
You can tax an LLC as an S-Corp. Also, unless this is your first tax yr making money online, you need to pay quarterly tax estimates or you'll get a penalty.
I make close to 4k a month through my job and have found that taxes take out about 30% at that level. So 42% seems a bit highbut whats the worst that can happen, you get a nice fat bonus come april. Basically I would save about 30% per month for taxes, and then deal with any other expenses as they come.
Usually you would just have to file a Schedule C. But like always, seek out a professional accountant, its worth the money. They often pay for themselves by finding deductions you would never think of.
Hey guys! as for me, net income monthly is x,xxx.xx , so how many percent should i save for tax? 20%?
http://www.irs.gov/formspubs/article/0,,id=150856,00.html <-- uncle sam tax http://www.irs.gov/businesses/small/article/0,,id=99021,00.html ↑ state tax.. In my case, terminator tax
The percentage you need to pay depends on your total taxable income. 42% would not be enough for a high bracket. You must pay quarterly installments equal to last years obligation or you will get a penalty. If you had no income last year, then you can wait.