How to pay estimated taxes

How to pay estimated taxes

So every business and individual according to the IRS are required to pay taxes as we receive our income. I call this paying as you go. It is actually helpful in preparing for taxes at the beginning of year and for avoiding extra cost. The IRS says anyone who owe more than $1,000 in tax and has not paid taxes through out the year can be penalized and charged interest. Many of us forget, but it’s just like getting paid as an employee.

The employer negotiate your gross pay, you give permission to withholding tax, social security, medicare and you are paid the net amount. This is true for businesses as well. You are responsible to pay a 15.3% self employed tax

Why you should switch to S Corp

Why you should switch to S Corp

When starting a business, there are two ways you can become official. You can incorporate as a corporation or you can form an LLC. Many people usually go with the LLC . Sometimes because they haven’t mapped out their business goals, sometimes because LLC is easier to maintain, they just want to get started and be official or someone simply told them to get an LLC.

There are different entity structures you can pick based off the way you choose to run your business. However, an LLC is the most common business structure. What many have found is, once they start making a nice profit in their business, the taxes owed become rather much.