SirI, can you tell me what, as a general rule, independent LNC's would be wise to set aside for taxes. I have heard 30%. Does that sound reasonable for your experience?
Aug 26, '08
You need to seek out advice of an accountant or Tax Attorney.
Here is a link to the IRS:
Personally, and I cannot give out tax advice, I plan on around 33%.
Aug 26, '08
To all reading, don't forget about specific business/state taxes that have nothing to do with what comes out of your "normal paycheck like $$ for the IRS, Medicare, and SS.
When you file to become a business entity, you are placed on your state's map for paying various fees. Some, such as the franchise tax in TX, affect you if you make over $300k/yr, but you still have to file with the state, even if you don't make enough to have to pay the fees. If you fail to file a DBA, even if you don't do an LLC/Inc etc, if they find out you are making money from a business, they can come back and require you to pay fees, penalties, and back taxes.
A good accountant will keep you in the clear.
Aug 27, '08
In a previous life, I was a licensed massage therapist. I continued working at the hospital part time because I wasn't willing to leave the bedside at that point.
I increased my withholding at the hospital to pay my income tax, SS, etc. from my massage business. That way I didn't have to worry about coming up with a sum of cash for the IRS at the end of the quarter/year.
This was about 15 years ago, so checking with an accountant prior to doing anything like that now is definitely the best course of action! Tax laws change, and just because it worked back then doesn't mean it will now. It did make for 'one less thing to deal with' at the time, allowing me to focus on building my business, and kept me current with the IRS, SS, etc. throughout the entire year. (Actually had a bit of a credit when all was said and done!)
Just some food for thought...