|Forum topic by mcg1990||posted 03-02-2015 08:51 PM||732 views||0 times favorited||7 replies|
03-02-2015 08:51 PM
I’ve just gotten my business licenses, EIN, sales tax all official so that next year I can do my taxes relatively stress free. Relatively being the operative word.
I’m a one man business – sole proprietorship – and have opened a business checking account with which to handle finances. I’m married and so I’ll be filing jointly, and my wife’s income is around $60,000.
Is that about right? I’m not expecting a full run down, because I know that’s what an accountant is for, but I’m just curious as to whether I’m on the right track.
For taxes, am I right to consider it this way.. with mine and my Wife’s income we’ll probably be in the 25% bracket, I have to pay 10% in sales taxes, and 15% in SS/Medicare etc., so 50% total. That means if I’m building a bed that’ll cost $100 in materials, take 3 days and I want to earn $500 on it, then I have to charge $1100 and put $500 into the holding account to for taxes?
My next question is regarding deductions. Do I have to take those into account quarterly, or just at the end of each tax year? I know I’ll be able to deduct for utilities and a percentage of the house value (as my shop is in my yard), and also a home office, but I’m not sure how this works. Let’s say for 2014 I spent $10,000 on materials and received $30,000 in payments, making my net profit $20,000, if I have $5000 in deductions (no idea if this is realistic or not) will they look at my earnings and tax me X% of $15,000, or does it work another way?
On second thoughts, I think I might just apply at Pottery Barn..