Taxes: estimated and self employment taxes. - Cleaning Talk - Professional Cleaning and Restoration Forum
 
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post #1 of Old 02-21-2014, 12:40 AM Thread Starter
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Taxes: estimated and self employment taxes.

I finishing up all paperwork on starting my cleaning business but I am confuse on the tax issue. if anyone can guide me through this I will be grateful.
I live in FL and have all business paperwork done, from registering as a sole proprietor, sale and use of tax, biz tax registration, EIN, fictitious name and the hole nine yard. During my research as a sole proprietor I read that I have to pay estimated and self employment taxes every quarter. Now, if i haven't received a dime during my first quarter what do I do? I have a friend thats in the cleaning business as well but told me that he doesn't pay these taxes until the end of the year when he files his taxes with the 1099 forms he receives from his customer on Jan. Do i do what my friend is doing? I just don't want to miss something and at the end I will owe the IRS. Please help!!
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post #2 of Old 02-21-2014, 01:34 AM
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If you have no sales to this point then you do not have any need to file quarterly. Once you start earning income and owe payroll tax you will have to start filing quarterly but not now.
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post #3 of Old 02-21-2014, 07:53 AM
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I don't know what Florida makes you do, but as far as Federal you need to file 1040 every quarter that you make money. If you owe $0 for the quarter, you do not have to file a 1040. Here is the 2014 link: http://www.irs.gov/pub/irs-pdf/f1040es.pdf Remember, on the 1040 you have to pay Estimated taxes, both sides of social security, and both sides of medicare. Here are the tax brackets for 2014 http://www.forbes.com/sites/kellyphi...unts-and-more/. Then you must pay 12.4% in social security and 2.9% in medicare taxes http://www.ssa.gov/pubs/EN-05-10022.pdf.

Now, you also get deductions. If you are making less than about $50,000 a year then you should be setting aside about 20%-25% of your total income for Federal Taxes on your 1040. Also set aside your Florida income taxes (if any). If you make $50k to $100k per year you need to set aside about 25%-35% of your income for Federal Taxes plus Florida income taxes (if any).

Of course, I would encourage you to ask a cpa instead of taking my work for it. I am not a cpa, however I do use one.

Some more information: http://www.daveramsey.com/article/ta...oney_business/
http://www.daveramsey.com/tax-tips/home/

Last edited by Maid to Shine; 02-21-2014 at 08:18 AM.
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