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Tractor Talk Discussion Forum

OT: Business Income TAX?

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Rod M1

11-15-2003 19:50:20




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Hi in general what % dues a business have to pay in income tax? Do they have to pay Federal and state income tax or just state? I'm thinking of starting a business and just number crunching. THANKS




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Matt Clark

11-18-2003 06:01:45




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
I guess the wife and I will find out pretty soon. In August, she opened a women's only fitness club and is going great guns. Probably (next year, anyway) have about $70K or better in revenue. Unfortunately, as we don't "sell" anything, and most of these members have the fees deducted directly from their checking accounts, can't "hide" anything and it's all taxable...sheesh. I figure, overall, we'll probably have to fork over about %33 to the gov. between state & fed taxes and FICA, both sides. It ain't gonna be pretty next year, but at least she can't bi**h about the boss!

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Jason

11-16-2003 14:02:49




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
it'll depend on what type business you setup. Corp, LLC/Partnership, or sole properiter. Sole prop will be just the same as you'd file now but with more schedules, like C or maybe F if your farming. LLC will report everything on a 1065 and then dump onto a K-1 ( kinda like a w-2). Corps file their own tax forms and pay their own taxes and you get taxes for what ever you get paid in wages. Groups like Farm Credit have seminars on changes in tax law that are very helpful if your a farmer. So go find an accountant and talk to them because this info in really too general to be of much help.

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Allan

11-16-2003 07:05:27




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
Hi Rod,

The first few years, we paid about 27% overall. We just incorporated within the last year or two.

After all the lawyers, accountants and banking fees I think we might have gained $1.62. :>)

Bottom line: You are going to be taxed within an inch of your very existence; but you will be working for yourself, which is a nice feeling.

Allan



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Irv

11-16-2003 07:01:28




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
My wife and I have run a business for 14 years. I think you should get an accountant to start you out. Later you can do your own stuff. Its not too hard, a small business doesn't need allthe stuff a big corp. does. But you need to do the basics - a comm. A CC class is a good idea. My2c Irv.



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Paul Janke

11-16-2003 05:55:58




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
Don't forget that less than minimum wage is legal. It is called self-employment.



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John (C-IL)

11-16-2003 04:33:23




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
I farm and have a small business (Custom Application). You need to do a lot of research before getting into a small business. THe good news is there is a lot of help and information out there for you. TAXES TAXES TAXES. One of the joys of owning a small business is paying taxes. If you are an unincorporated sole proprietor you will pay state and federal income tax, self employment taxes and if you are selling a taxable item you may have to collect sales taxes. If you have employees you open a whole new can of worms. Suffice it to say that you need to plan on paying 30% of your net taxable income to the state and federal government. Proprietorship is what makes this country great, go for it.

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Jim was in UK

11-16-2003 02:38:24




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
Rod,
You may also give consideration to attending a small business class or workshop. I've seen these listed in the catalogs for colleges. I am also giving consideration to attempting to go into a small business of my own in a couple of years if and/or when I leave the military. Depending on the state that you are in, I do know that you will have to pay a quarterly income tax to the Fed Gov't, state, and possibly the city. I am currently living in New Mexico, and my girlfriend who has her own business has to pay both. In Texas (There is no state income tax) I believe that you only have to pay Fed. Good Luck with your entreprenuer venture.

Jim

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Willy-N

11-15-2003 21:09:16




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 Re: OT: Business Income TAX? in reply to Rod M1, 11-15-2003 19:50:20  
Contact your Secertary of State and ask for Tax Requirements. It changes from state to state and some citys or counties charge also. Also if your a Company or Incorperated different rules apply. Good Luck having owned at least 3 businesses in the last 20 years. Tons of paper work and a CPA does my Taxes! Mark H.



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