Join Martha Garzon for an in-depth discussion in this video Understanding federal tax obligations, part of Running a Web Design Business: Defining Your Business Structure.
…As discussed earlier, sole proprietors are considered self-employed,…which comes with its own set of tax obligations.…As of 2014, sole proprietors must pay a self-employment tax…of 15.3% on all business profits of $400 or more.…Sole proprietors can use Schedule SE, Form 1040,…to calculate the tax due on their net earnings.…
You can also use one of the many online self-employment tax…calculators to calculate this tax.…Sole proprietors also need to determine the estimated tax they'll owe…each quarter.…You can use form 1040-ES, estimated tax for individuals, which has a worksheet and…a table tax to help you figure out how much money you need to pay.…You can pay your estimated taxes online, by mail or over the phone.…Form 1040-ES also comes with four vouchers that you…can use to pay by check or money order.…
I personally like to do everything online through…the electronic federal tax payment system or EFTPS website.…Here are the payment due dates.…To avoid penalties, I highly recommend that you…pay your estimated tax in four equal amounts by these dates.…
- Understanding your business-structure options
- Choosing your business structure using five key questions
- Establishing business names and fictitious business names
- Obtaining local licenses and permits
- Applying for city/county tax receipts
- Opening a business bank account
- Understanding state and federal taxes
Skill Level Beginner
1. Overview of Business Structures
2. Sample Businesses
3. Forming a Sole Proprietorship
4. Forming a Limited Liability Company (LLC)
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