ForumsTaxes and Payroll

hmm...I see what you're saying...(about paying tax twice) but I'm supposed to pay that portion of tax to the state quarterly...so you're saying that by reporting it as income I end up paying taxes on it twice because I have to pay federal tax on it? I'm not sure I completely understand...

But thanks for the answer to what I end up reporting...that's what I thought.

Hi, design76! I am a jewelry designer and have used a graphics designer for my web site for a few years now. From my end of things, I can tell you that when my taxes were done the graphic design services were accumulated for the year and entered as professional services for the totals I was invoiced. It also falls in the same bucket as Webmaster fees, etc.

Now, for your additonal expenses, like you mentioned the printer you used and your postage....I think you would want to itemize those individually. You have to factor the cost of doing business and postage expense is a pretty major category that almost everyone uses as a business owner and separates out as an expense which would include stamps, delivery confirmation, messenger items, etc.

One final note, there is always a lot of talk about having an accountant. But if you are knowledgeable and up-to-date on tax issues, use TurboTax and are savvy about the law and you may have an informed partner or husband/wife and your business is truly a small business...an accountant would really be a luxury and excessive in some situations. If you free-lance and do a handful of projects a year, you wouldn't need an accountant.....but when your business is truly growing and gets complicated and hairy and you feel like you're losing control then I would say it is a must.

Wiw, you said a mouth full. You have a couple of questions that I think need to be dealt with. Regarding your Federal taxes and wha'ts considered income, Not exacly, the cost's our items that you need to pay someone to do, COULD be considered an expense and can help reduce the amount of income that you would actualy have to pay income tax on. For example many people don't relaize that if you the travel you do between your home and your business is not tax deductable, but traveling from your office to a customer or to meet a customer at a restaurant is deductable. If would be more speicifacally to discuss more specifics with you if your interested.

In certain Universities there are, however they are typicaly, designed for accountant's of busniess mgt majors who want to take it. I would contact your local community college and ask them if they do offer a tax class, which would cover Schedule C and the dreaded Schedule SE (Self Employment Tax). If they do not ask if they would be open to the idea, and see if you can get a few friends, and friends of friends to join in the interest. My experince is if there's enough interest in the subject then the college would consider offering it as a non-credit course.

Regarding Turbo Tax. I'm not sure how much they have improved from earlier verisons, but I would take the results with a grain of caution. I used it and it's nice on the big stuff, however some of the fine details it doesn't do so well, for example, I had a few customers who came in to do their taxes last year using Turbo, and theydid not take the Telephone Exise tax credit which they where elegiable for. I would also be cautious as a small business owner, on your schedule C and also probably be wise to double check the math on Schedule SE by hand or calculator.

I think the general public think that taxes is the big bad lion and afraid of them, however if you just take some time and learn them they are not difficult to do for the general public. Yes I would include Sole Proprietor's in that group also.