Self-Employed?
Paying too much in Tax? Check This Out We Will Save Ya Money. |
As
September 15th approaches, it is time for all self-employed people
with profitable businesses to make their third quarter tax estimates.
It
may sound too simple, and that the above is no big deal.
Look at the following example, both clients are single.
(All
items use 1998 tax rates
and rules) Gross
(Collected
Income from
Services) Expenses
that are
Justifiable, but
Need searched out Net Business
Income
(Income Self-
Employment
Tax is Assessed on) Less,
Standard
Deduction Less,
Personal Exemption Taxable
Income Tax
on Income Self-Employment
(Social Security Tax
On Net Business
Income) Total
Tax |
$10,000
4,000 $
6,000 4,250 2,700 None None 848 $ 848 |
$10,000 not
considered $10,000 4,250 2,700 $3,050 $
458 1,413 $1,871 |
With proper planning, and as the above taxpayer’s income increases so there is some flexibility beyond the daily necessary living expenses, there are other options that can decrease tax for the “careful” taxpayer, such as setting up retirement plans, home purchases (to provide more deductions for income tax) and other considerations. Even on a simple situation such as shown above, the tax difference can be significant - get proper advice and assistance if you are self-employed!
Be A Famous Writer
Submit An Article
Send mail to editor@biznetonline.com with questions or comments about this web
site.
Copyright © 1997 ~BizNet OnLine Magazine
Last modified: November 08, 2002