Erin
For figuring and filing taxes, the IRS has a worksheet but I just use tax preparation software which includes the forms for self-employment (generally, Schedule C and Schedule SE). I follow the prompts to create a fake 1040 using my estimated income and expenses for the year (since my employer is already withholding for my day job, I don't include that in the calculation until the last quarter) and then pay one-fourth of that at the next quarterly due date; the program will link you to the forms and the addresses (you can pay on-line but I prefer to pay by check so I have a paper copy). I run the program every quarter to see how my estimate is holding up and determine what the next payment should be. For the last quarter, I include my income and withholding for my day job (using the figures on the most recent paycheck stub) and then adjust accordingly. I know that there is a chance that I'm either overpaying or underpaying and that I'm missing out on some accounting methods that might reduce my taxes but since my business is just a side business, I'm willing to accept those possibilities to keep it simple and not get stuck with a big tax bill every April. So far, it has worked.
One of the best things about using the tax prep software early in the year is that it alerted me to some expenses that I could deduct so I could track them for the rest of the year and not have to be hunting down 12 months worth of receipts in March.
One word of warning - when I run the forms quarterly, I assume that I will only have one exemption, will use the standard deduction and won't have any other tax credits. The end result is that I probably over-estimate my tax liability but I'm one of the ones who would rather get a refund than have to pay in April.
Which software do you use? Is it reasonably priced...and piggybacking onto that, is this the kind of thing I can write off if I only use it for business, not for personal record-keeping?
I originally used TurboTax but moved to H&R Block a few years ago when Turbo increased the price. There are people who feel strongly about one version or the other but my primary concern is price so I shopped for the best deal. This year, I downloaded H&R's Premium version for around $40 on a returning customer offer but I think you can still get it for less than $50. Since you are using the 2010 program as a tax planning aide, you might be able to deduct it as business expense but I'm not sure. If you use the 2011 program to actually compute and file taxes (which would include all of your sources of income), then it would be a deduction that is subject to the gross income limitation and so probably won't result in an actual deduction.
Thanks, lcat; I will check both of them out.
::bookmarking the ENTIRE THREAD::
I know, amych!
::lugs in cappucino machine and ratty, yet comfortable, sofa::
If the business is going to be your sole source of income I really recommend finding a good accountant. It is a huge stress reliever for me to have a real face to deal with and also good peace of mind knowing I have a representative in case of an audit.
Midwest Haunters Convention
The Midwest Haunters Convention (MHC) is the largest Halloween show of its kind in the US serving a primary audience of Haunted Attraction Producers, Actors, Artists and Home Haunters. It features a 60,000 square foot vendor trade show with over 75 vendor booths – and provides regional businesses and residents the opportunity to shop for professional quality Halloween related products.
fyi, I spotted an article about Expensify in the business section of the paper on Sunday. I can't track down the exact article, but it sounds like something useful for people who have lots of expenses and not enough time to fill in reports.
I've considered attending the MHC a few times, but currently I don't know how I could take on much more work during the Halloween season. As it is I have 15-20 people working for me just to pull of the Universal Studios event. Still it would be fun to see what other folks are doing in smaller venues.
