Small business/hobby software tax help

[disneymarie]

Anyone know were I can find advice on managing taxes, cost, overhead, etc.

I know we will have quarterly IRS, state, the FICA is a concern. Confused because the check comes in for services, but overhead will not reflect true pay amount.
I am an employee of the company dh is doing the subcontract work. Wish they just hired him as employee, but easier for them. I work insurance fraud he is doing surveillance, process service. I am the brains he the braun.

The most I make independant contract is $8,000 half that is cost to reimbursed, mileage, film, tapes, DVD making, tapes from recorded statement uploaded to the Internet,etc. I have to buy all my equipment, supplies, licenses, bonds, etc.
No not a lot of money, but it pays our taxes and offsets the health cost.

 

[Marionnette]

Anyone know were I can find advice on managing taxes, cost, overhead, etc.

I know we will have quarterly IRS, state, the FICA is a concern. Confused because the check comes in for services, but overhead will not reflect true pay amount.
I am an employee of the company dh is doing the subcontract work. Wish they just hired him as employee, but easier for them. I work insurance fraud he is doing surveillance, process service. I am the brains he the braun.

The most I make independant contract is $8,000 half that is cost to reimbursed, mileage, film, tapes, DVD making, tapes from recorded statement uploaded to the Internet,etc. I have to buy all my equipment, supplies, licenses, bonds, etc.
No not a lot of money, but it pays our taxes and offsets the health cost.

This is an area where paying an accountant is worth the price. My brother-in-law briefly ran a small business that was related to his hobby. He didn't follow the proper channels for filing his taxes and ended up paying huge penalties and interest on the money he should have paid in taxes. The same thing happened to a friend who didn't properly account for his self-employment as a handyman.

OTOH, we pay an accountant to do both our business taxes and our personal taxes. He manages to find deductions that we wouldn't know how to take on our own. And he will accompany us if there is ever an audit. He's worth every penny that we pay him.

 

[pklein09]

It sounds like they're going to report your husband's earnings on a 1099 MISC, Non-employee Compensation. If that's the case, that income can be reported on Schedule C with your 1040. On the Schedule C, you report gross earnings and all your expenses. The net number is what your taxes will be based upon.

 

[MrsToad]

I was an independent contractor for several years, and Turbo Tax was a big help in completing my Schedule C to report that income and my expenses. I did use an accountant one year, but Turbo Tax was great at explaining the steps and details, and I used it for all the other years.

I didn't have to pay taxes quarterly because DH and I filed jointly and we had extra Federal and State taxes withheld from DH's paychecks through the year (he completed new W4 forms for State and Federal with his employer to request the extra withholding). I don't remember the exact details of the rule, but if you were filing jointly and ended up receiving a refund, or if you had paid in at least 90% of your combined taxes compared to the year before, there was no penalty. This worked best for me as I didn't want to worry about missing the quarterly filing deadlines.

 

[disneymarie]

I was an independent contractor for several years, and Turbo Tax was a big help in completing my Schedule C to report that income and my expenses. I did use an accountant one year, but Turbo Tax was great at explaining the steps and details, and I used it for all the other years.

I didn't have to pay taxes quarterly because DH and I filed jointly and we had extra Federal and State taxes withheld from DH's paychecks through the year (he completed new W4 forms for State and Federal with his employer to request the extra withholding). I don't remember the exact details of the rule, but if you were filing jointly and ended up receiving a refund, or if you had paid in at least 90% of your combined taxes compared to the year before, there was no penalty. This worked best for me as I didn't want to worry about missing the quarterly filing deadlines.

That is what I did last year for income from process serving. The Turbo I entered everything. But then it gave my the option to not itemize because all the kids deductions offset. I can see now though that would affect the Real net. I did not need the itemize , but I probably should have for net.

We are both on Social security, no large earned income except my $8,000 before mileage and cost offset. Would Turbo would insert from Quicken and help?

Started from Jan for receipts, I wonder if it helps to have bookkeeping software for the nominal amount?

 

[pklein09]

That is what I did last year for income from process serving. The Turbo I entered everything. But then it gave my the option to not itemize because all the kids deductions offset. I can see now though that would affect the Real net. I did not need the itemize , but I probably should have for net.

We are both on Social security, no large earned income except my $8,000 before mileage and cost offset. Would Turbo would insert from Quicken and help?

Started from Jan for receipts, I wonder if it helps to have bookkeeping software for the nominal amount?

Itemizing is done on a schedule A and involves medical deductions, property taxes, mortgage interest, and charitable contributions among other things. You would itemize when those numbers are higher than your standard deduction. The information entered on a Schedule A and Schedule C are entirely different. As for "kids deductions," that is typically separate as well unless you start hitting high income thresholds. If you don't want to give Turbo Tax a shot again this year, you may want to consider using a registered tax return preparer.

 

[MrsToad]

That is what I did last year for income from process serving. The Turbo I entered everything. But then it gave my the option to not itemize because all the kids deductions offset. I can see now though that would affect the Real net. I did not need the itemize , but I probably should have for net.

We are both on Social security, no large earned income except my $8,000 before mileage and cost offset. Would Turbo would insert from Quicken and help?

Started from Jan for receipts, I wonder if it helps to have bookkeeping software for the nominal amount?

Itemizing is done on a schedule A and involves medical deductions, property taxes, mortgage interest, and charitable contributions among other things. You would itemize when those numbers are higher than your standard deduction. The information entered on a Schedule A and Schedule C are entirely different. As for "kids deductions," that is typically separate as well unless you start hitting high income thresholds. If you don't want to give Turbo Tax a shot again this year, you may want to consider using a registered tax return preparer.

As pklein09 said, the business expenses go on Schedule C, which is totally different than the kids deductions and the rest. The Schedule C handles specifically the business income and subtracted expenses to give you your net income from the self-employment earnings. Turbo Tax explains each step of completing the Schedule C. I did not use any other accounting software - I just logged my receipts and mileage into an Excel spreadsheet which had columns for expense categories, like putting pens and paper under Office Supplies and new equipment in an Equipment category.