Is anyone here self employed?

[kdibattista]

Good Friday morning everyone!!!

I'm looking for any advice, guidance, tips, etc. because I am CLUELESS about this. I am currently in school and will be graduating as a muscle/massage therapist in August. I'm planning on working on my own either in my home, at client's homes (by referral only) and/or establishing contracts with local doctor's offices, etc. I want to do this right and I'm not sure where to begin.

I guess I'm looking for information on how I would/should go about doing this relating to taxes, EINs, business credit and anything else you are willing to share.

Thanks in advance to anyone who can help!!!

Hope everyone has a great weekend!!!

 

[Tinkim]

Hi Kim,

I am self-employed as a medical transcriptionist. Have been doing it for about four years now. I can't really help with the business credit but as far as taxes you didn't mention if you are married. If you are it helps to have your husband take an additional amount out for withholding from his check. The IRS doesn't care who does the withholding and it may make up for some of your self-employment tax. If not, I would suggest setting a set amount of money aside each week and paying in quarterly. My husband has a little extra taken out of his check and it seems to work nicely for me. Haven't owed the IRS yet (keeping fingers crossed).

Kim

 

[ORD2KOA]

Aloha, Kim.

I'm self-employed, as well.

Sounds like you're going to be an independent contractor. You asked about an EIN, but you don't need one (and IRS is reluctant to issue one) unless you're going to hire employees.

Kim has the right idea about the withholding. I withhold extra from other income, and don't have to mess with quarterly filings. If you aren't able to do that, you'll need to file estimated taxes on a quarterly basis.

Good luck.

Nancy

 

[kdibattista]

Thanks guys!!! So, I won't have to file a different tax return other than our personal tax return?

I am married and he does actually have extra taken out each paycheck (that's our Disney trip money ). I guess I will start having him take out more.

Any other help?

 

[Tinkim]

Kim,

You will still be filing personal income taxes but will most likely be filing the long form with a schedule C for your business. Keep those receipts. There are so many things that are deductible when you are self-employed. There is a ton of information at the IRS website if you have the time to look through it. I debated about the extra withholding because I felt in a way I was letting the IRS "hold my money" for me with no interest so they could turn around and give it back to me but I found the idea of keeping it in a savings account in the event of owing them money scary because I thought maybe it would be too tempting just sitting there what with WDW calling my name all the time.

Kim

 

[cgcw]

I will second what Tinkim said about saving those receipts.

I operate a home daycare out of my home. The best thing you can do for your business is find an accountant who is familiar with your business expenses/deductions. It's amazing what can be claimed on taxes. Because my business encompasses all of my home, I am able to claim a portion of all of my utilities and property taxes as well as claim all of my direct expenses.

Make sure you keep track of all of your mileage if you are driving to a location. It may come into play for your taxes. Up until this year, I always claimed per mile. But, now I have a big van which is used mostly for my daycare. It's considered a cargo vehicle and as long as my mileage proves it's mostly for the daycare, all expenses are covered.

I also claim everything under my SS#. DH has extra taken out of his check to cover the taxes. We prefer to do that because I've heard the IRS are sticklers on quarterly tax payments being received on time (and not a day late).

Best of luck.

 

[LtlTee]

I also worked for years as a self-employed medical transcriptionist. I worked for a couple of different offices and always filed a 1099 as an independent contractor. My husband upped his withholding to cover me and I never owed taxes.
The biggest help to us was using a tax accountant. He always helped me find decductions and business expenses that I never would have thought of otherwise (all legal -- just stuff that I had never considered!)

 

[ORD2KOA]

Kim,

I think it would be a good idea for you to download from the IRS website the instructions for Schedule C. It'll give you a good idea of what you're expected to do. It's better to know that "now" rather than at tax time next year.

Re: the withholding, as much as I hate to give the government a free loan, when you're self-employed, you'd have to send them quarterly payments, based on what you "think" you'll earn, so it's pretty much the same thing. I hate doing tax paperwork during the year, and they penalize if you haven't paid in enough, so the extra withholding just makes it easier.

Yikes--I just looked at the clock. I need to hit my pillow (2:45 am here).

Have a great Friday.

Nancy

 

[ms_flo]

Gee, I can't believe how much time I'm spending not planning for Disney, but I can't resist getting info from people who have experience.

I would really like to find something to do from home. Medical transcriptionist sounds interesting. I see it a lot on the learn by mail programs, but I'm always afraid those places are just another way to separate me from my money. Where could I get reliable info about becoming a medical transcriptionist? Is the demand as high as they make it seem?

TIA

 

[Hagred]

I can't say this enough: tax accountant. Or maybe just a regular accountant. Their services are invaluable and you'll be supporting a fellow entrepreneuer.

Now that I've got that off my chest I realize someone just starting off may not be able to afford a good tax accountant. So here are some suggestions:

1). Your local bookstore may have some great ideas about the ins and outs of starting your own business in the self-help section. I'd start there. Or your local library.

2). ORD2KOA suggested the IRS.gov website. Another excellent suggestion. I'd also check to see if your state has a website as well.

3). An idea: while you may not be able to keep an accountant on the payroll all year, there's nothing wrong with calling one up and saying "How much would you charge to help get me started?" For a nominal sum, they may be able to guide you into getting yourSELF set up. Again, their advice and knowledge is very valuable.

Good luck to ya! Best wishes for your future success!