I'm starting up my small business soon and honestly the taxes aspect of it all is so scary to me that it's made me rethink if I even wanted to launch my business or not... But you explained everything in a way that was easy to understand! That being said though, I will DEFINITELY be hiring a CPA to help guide me through this! 😅
If you'd need help with your LLC, EIN, or CORP business tax filing then I'd advise you to reach out to Paul he's a consultant with the IRS and he'd get you sorted out with that and you'd receive your funding without omitting any dime at all
My pleasure Ricardo! Make sure you check out one of my other recent videos on the topic of LLC vs Sole Proprietor vs S-Corp for even more info. If you have any other questions let me know!
Sorry if this sounds like a dumb question, but this would be my first year with a small childcare business ran from my home. I’m trying to get ready with time for this upcoming years taxes, but I am CLUELESS for doing my business taxes or how to go about it! I guess my question is how would I calculate gross income for my business? I currently use Square, now I don’t have myself on payroll whatsoever, should I place myself as a employee how do I go about that? Lastly after watching this video I just realized I have to do separate taxes for my business and myself? I assumed it was a all in one 😖 I also do have my EIN and of course my business bank account that I use daily, I’ve also kept all receipts. Please HELP 😩😩
Thanks kindly for this video 🙏🙏 , my question is i paid someone and issued him a 1099 Misc how do i report it on my personal taxes ... what for should i use , im using a free software
I have an online sole proprietorship business. I currently only pay sales and use tax. Should I be paying self-employment tax also or is that the only type of tax I should be paying? If there are any other types of taxes I should be paying, can you inform me on what they are?
Don’t worry Jessica! All is not lost. It’ll take some work to get everything sorted out, but surely you have bank and credit card statements to track all of your expenses as well as income! Just need to go through them one by one to get caught up!
I'm happy I found your video , well I'm lost ... I'm moving to USA and I have no idea about taxes ,, all I want to know ... Is in going to make business and sell Accessories and hand painted nails etc ... For example If my sales were 10K for four month how much my taxes nearly gonna be ... I'm gonna live in Michigan . Please just give me nearly numbers . Thanks
Hey Greg! Thanks for watching! A single member LLC (the legal structure of a biz) can either be taxed as a sole prop (by default) or as an S-corp (if you file the paperwork). If you’re just starting out in business, just continue to be taxed as a sole prop. Once you start making some serious money, change it to the S-corp election and pay yourself a reasonable salary (on payroll) for some big tax savings.
I am a small business owner , and I received a notice from CRA that I owe quite a huge amount in GST HST 🥺! I really do not know what this is and where it came from !! I do not sell any products . Guide pls
Hey PTGeek! Thanks for watching! I am assuming you are located in Canada! I'm super sorry but my knowledge of Canadian taxes is pretty much nil. One of my pals Jacky Kuk has a UA-cam channel and he's a financial advisor in Canada. I bet he would be able to help!!
Hey Christian, that's an awesome question! In this video I was focused on year-end filing, but I think I'll do another video soon about quarterly tax filings. Another very important topic!
My number one task on my to do list is get a separate business account and credit card. I currently have everything running through my savings & personal credit card which I know is a big no no. I've been in business 3 years now, will I run into any trouble for not having a separate account during this time?
Hey Missy! Thanks so much for watching and so sorry it took me a while to reply! I've been trying to get caught up on my comments lately and I'm happy you asked this question. The business bank account is absolutely essential and if you haven't gotten one now, I recommend you do so ASAP! Like, today! Check out your local credit union for an account that's completely free with no monthly fees. If you've done bulletproof bookkeeping for the past 3 years, you'll probably be alright, but if you've not, then you might run into some issues down the line if the IRS ever catches on and does an audit. My suggestion would be to get that business account set up and start doing all your transactions through that account, and then connect with a local CPA in June (once they've had their break) to get yourself on the right track. Don't worry, you're not the only one who's done this! If you have any more questions let me know!
@@PracticalPersonalFinance awesome thanks so much for the detailed advice! As soon as I refinance my house I'm going to set up a business credit card (I believe initially i have to do through my own credit since I don't have any business credit yet) and will also open up a business bank account as well. I keep super accurate records of everything so I should be good. I have not worked with a CPA yet, I've been doing my taxes myself for the last 2 years. Goal is to get one for next year and have them look over everything I've done and make sure everything is good.
Thanks for the awesome question Angel! If you earned less than $400 from self-employment, you are not required to file Schedule SE. But if you earned $400 or more, then you'll need to file as I outlined in this video.
It does not make a huge difference since, as a single member LLC, all of the business profits are your income anyway. I typically do my quarterly estimates from my business account, and my end-of-year taxes (if I owe anything) from my personal account.
Hey Leann! Thanks for watching and for the great question. It’ll take some work to untangle everything, but it’s possible. The way I would do it is to go through my bank and credit card statements, one by one, and categorize all of my expenses by whether they’re business or personal. Then I’d put the business ones into different categories based on what they were spent on. It’s a long process and I’ve done it before back in the early days of my business. But the feeling when you’re all organized is just great!
Any tips or words of advice for how to approach these things with a HVAC company? I’m about to take my contractor test, and filing taxes has always been in the back of my head that I need to Better understand
Hey Isaac, thanks for watching and thanks for asking this awesome question. Congrats on your new business venture - with your mindset of looking into this stuff now, I bet you are going to be very successful. You'll definitely want to get your business set up as an LLC, which you can do easily on your own by filling out the proper forms in your state. You also want to make sure you get a separate business checking account from Day 1. Talk to 3 or 4 different CPA's after tax season is over, and find one you really jive with. For your first year or two, just operate as a normal, single member LLC. You'll get taxed just like a sole proprietor which is totally fine. Once you have your business really running and you start making more than a regular HVAC technician's salary in your area, then have your CPA change you over to an S-corp so you can save on taxes. The S-corp declaration has to be done in January or February, so if I were in your shoes I would look into it beginning in January 2023. Any other questions let me know!! :)
Awsome thanks so much for the info, Also I don't know who needs this, but I'd like to bless anyone since you've blessed me. Jesus christ loves you and gave his life on the cross so we could live and have a relationship with god. All we have to do is recognize our sins and ask for forgiveness and believe in jesus christ his son.
My business is a sole prop and I've made less than $400. My husband and I file jointly and since I made less than $400 I didn't know if I was supposed to file or not. Our personal taxes have already been done so what should I do?
Great video! Super helpful...Question: What is the minimum amount you have to earn in revenue before you have file for taxes. I just started a small LLC and did not clear 1k in 2020. Thanks!!
Hey Research Vault!! Sorry it took me a few days to reply, I've been having some issues with getting notified about new comments. I believe the magic number is $400. At that point, technically I think they want you to file, report that income, and pay the self employment taxes (as well as the income taxes). It definitely complicates your tax situation though and could cost several hundred dollars, so I can understand why you might want to avoid it for such a small amount of income. I personally like to do things strictly by the book, but I've heard of other people who are a little more aggressive with pushing the boundaries. For example, let's say you made $600 mowing lawns and shoveling snow and all your customers paid you with cash. You decide not to report that business income. Is the IRS ever going to find out? The chances are infinitely small. Would I do something like that? Nah. But I've certainly met people who might.
Hey Reese, thanks for watching! If you do a Google Search for the form number, one of the first results should be the IRS website with the appropriate form.
Great question! Because it's you paying your personal taxes (since the income of your business is technically just your own personal income) I would transfer any money needed from the business account to my personal account, and then pay the taxes from my personal account. If you did it the other way around though, I don't think it's too much of an issue!
Hey Katherine!! Thanks for watching, that's a great question. It mainly depends on how you've structured your business from a tax perspective. If you've got an LLC and you've elected to be taxed as an S-corp, then March 15th is the deadline for filing your business taxes. But based on your question, I suspect you may be operating as a sole proprietorship or as a non-S-corp LLC. In that case, you still have until April 15th to get things sorted out. What I would recommend doing though, is opening a separate business bank account to use for all of your business income and expenses. That'll keep things from getting tangled up in the future. For now, you might just have to work a little bit extra to make sure it's all untangled properly. If I can be of any further help with this let me know!! :)
@@PracticalPersonalFinance Thank you so much for your help! I probably should have said this before but, I was claimed on my father's taxes for 2020 but I started an art business and I'm considering claiming myself and my business for 2021, but I have not registered my business yet and I'm trying to figure everything out! A little stressed about it too
Awesome! Well congrats on starting your own business!! First things first, I would suggest making sure your father is not claiming you as a dependent on his 2020 tax return (the one due April 15th, 2021). If you're filing on your own, you cannot be claimed as a dependent. If you haven't formally registered your business, you're operating as a sole proprietor, which is completely fine! Once you know your serious about it, I would suggest looking into registering as an LLC with your state to protect yourself in case of any legal proceedings - but no rush on that. I would also suggest enlisting the help of a local CPA to help you get your tax return done including the income from your business if your business income in 2020 was more than $400 - less than that and you do not need to file for self employment income!
![14 Biggest Tax Write Offs for Small Businesses! [What the Top 1% Write-Off]](http://i.ytimg.com/vi/5YggWhLeckM/mqdefault.jpg)
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I'm starting up my small business soon and honestly the taxes aspect of it all is so scary to me that it's made me rethink if I even wanted to launch my business or not... But you explained everything in a way that was easy to understand! That being said though, I will DEFINITELY be hiring a CPA to help guide me through this! 😅
If you'd need help with your LLC, EIN, or CORP business tax filing then I'd advise you to reach out to Paul he's a consultant with the IRS and he'd get you sorted out with that and you'd receive your funding without omitting any dime at all
Awesome Breakdown! Me and my wife just finished taxes for her business, really helpful video!
Nice!!! Always good to get them done early!
Did you fie yourself or paid someone to file them?
Thank you very much for your advise. It was very helpful for our small business
My pleasure Ricardo! Make sure you check out one of my other recent videos on the topic of LLC vs Sole Proprietor vs S-Corp for even more info. If you have any other questions let me know!
Ayy solid breakdown bro!! Smashed the like! 👊🏼☺️
Appreciate it!!! And dude you are blowing up!!!
@@PracticalPersonalFinance thanks mann
What about inventory you haven't sold? What if you have no income from the business yet?
Sorry if this sounds like a dumb question, but this would be my first year with a small childcare business ran from my home. I’m trying to get ready with time for this upcoming years taxes, but I am CLUELESS for doing my business taxes or how to go about it! I guess my question is how would I calculate gross income for my business? I currently use Square, now I don’t have myself on payroll whatsoever, should I place myself as a employee how do I go about that? Lastly after watching this video I just realized I have to do separate taxes for my business and myself? I assumed it was a all in one 😖 I also do have my EIN and of course my business bank account that I use daily, I’ve also kept all receipts. Please HELP 😩😩
Simple and informative. Thank you
Glad you liked it!
Thanks kindly for this video 🙏🙏 , my question is i paid someone and issued him a 1099 Misc how do i report it on my personal taxes ... what for should i use , im using a free software
I have an online sole proprietorship business. I currently only pay sales and use tax. Should I be paying self-employment tax also or is that the only type of tax I should be paying? If there are any other types of taxes I should be paying, can you inform me on what they are?
Can I charge the IRS late fees for holding my stimulus for 8 months 🤌🇺🇸🤺 they charge Americans out the wahzoo for being late
Charging the IRS late fees...now there's a pipe dream!!
Thank you
So , I didn't realize my small business would take off like it did and did not keep books so now I'm in a mess and need help 😭
Don’t worry Jessica! All is not lost. It’ll take some work to get everything sorted out, but surely you have bank and credit card statements to track all of your expenses as well as income! Just need to go through them one by one to get caught up!
hey can you explained how everything went for you?
I'm happy I found your video , well I'm lost ... I'm moving to USA and I have no idea about taxes ,, all I want to know ... Is in going to make business and sell Accessories and hand painted nails etc ... For example If my sales were 10K for four month how much my taxes nearly gonna be ... I'm gonna live in Michigan .
Please just give me nearly numbers .
Thanks
Thanks for the video! Is there any benefit to staying as a single member LLC instead of being taxed as a sole proprietor?
Hey Greg! Thanks for watching! A single member LLC (the legal structure of a biz) can either be taxed as a sole prop (by default) or as an S-corp (if you file the paperwork). If you’re just starting out in business, just continue to be taxed as a sole prop. Once you start making some serious money, change it to the S-corp election and pay yourself a reasonable salary (on payroll) for some big tax savings.
I am a small business owner , and I received a notice from CRA that I owe quite a huge amount in GST HST 🥺! I really do not know what this is and where it came from !! I do not sell any products . Guide pls
Hey PTGeek! Thanks for watching! I am assuming you are located in Canada! I'm super sorry but my knowledge of Canadian taxes is pretty much nil. One of my pals Jacky Kuk has a UA-cam channel and he's a financial advisor in Canada. I bet he would be able to help!!
@@PracticalPersonalFinance many thanks ❤️
what about quarterly taxes??
Hey Christian, that's an awesome question! In this video I was focused on year-end filing, but I think I'll do another video soon about quarterly tax filings. Another very important topic!
If i only made 12k in profit last year, should i report to Taxes?
The rule is anything more than $400 and you need to report! Do it for your own peace of mind.
My number one task on my to do list is get a separate business account and credit card. I currently have everything running through my savings & personal credit card which I know is a big no no. I've been in business 3 years now, will I run into any trouble for not having a separate account during this time?
Hey Missy! Thanks so much for watching and so sorry it took me a while to reply! I've been trying to get caught up on my comments lately and I'm happy you asked this question. The business bank account is absolutely essential and if you haven't gotten one now, I recommend you do so ASAP! Like, today! Check out your local credit union for an account that's completely free with no monthly fees. If you've done bulletproof bookkeeping for the past 3 years, you'll probably be alright, but if you've not, then you might run into some issues down the line if the IRS ever catches on and does an audit. My suggestion would be to get that business account set up and start doing all your transactions through that account, and then connect with a local CPA in June (once they've had their break) to get yourself on the right track. Don't worry, you're not the only one who's done this! If you have any more questions let me know!
@@PracticalPersonalFinance awesome thanks so much for the detailed advice! As soon as I refinance my house I'm going to set up a business credit card (I believe initially i have to do through my own credit since I don't have any business credit yet) and will also open up a business bank account as well. I keep super accurate records of everything so I should be good. I have not worked with a CPA yet, I've been doing my taxes myself for the last 2 years. Goal is to get one for next year and have them look over everything I've done and make sure everything is good.
making small sales, lets say, 50.00 dollars a month for lets say 4 months, how would filling taxes for those small amounts work??
Thanks for the awesome question Angel! If you earned less than $400 from self-employment, you are not required to file Schedule SE. But if you earned $400 or more, then you'll need to file as I outlined in this video.
I have a question. When I make purchases for my business, do I get credit for the sales tax too or just the price of what I’m buying?
Do you write a check to the IRS from personal or business account for taxes owed? I'm a single member LLC. Thanks
It does not make a huge difference since, as a single member LLC, all of the business profits are your income anyway. I typically do my quarterly estimates from my business account, and my end-of-year taxes (if I owe anything) from my personal account.
@@PracticalPersonalFinance Awesome, thanks!
If I didn't separate my business money from my personal account how do I fix it now?
Hey Leann! Thanks for watching and for the great question. It’ll take some work to untangle everything, but it’s possible. The way I would do it is to go through my bank and credit card statements, one by one, and categorize all of my expenses by whether they’re business or personal. Then I’d put the business ones into different categories based on what they were spent on. It’s a long process and I’ve done it before back in the early days of my business. But the feeling when you’re all organized is just great!
Any tips or words of advice for how to approach these things with a HVAC company? I’m about to take my contractor test, and filing taxes has always been in the back of my head that I need to Better understand
Hey Isaac, thanks for watching and thanks for asking this awesome question. Congrats on your new business venture - with your mindset of looking into this stuff now, I bet you are going to be very successful. You'll definitely want to get your business set up as an LLC, which you can do easily on your own by filling out the proper forms in your state. You also want to make sure you get a separate business checking account from Day 1. Talk to 3 or 4 different CPA's after tax season is over, and find one you really jive with. For your first year or two, just operate as a normal, single member LLC. You'll get taxed just like a sole proprietor which is totally fine. Once you have your business really running and you start making more than a regular HVAC technician's salary in your area, then have your CPA change you over to an S-corp so you can save on taxes. The S-corp declaration has to be done in January or February, so if I were in your shoes I would look into it beginning in January 2023. Any other questions let me know!! :)
Awsome thanks so much for the info, Also I don't know who needs this, but I'd like to bless anyone since you've blessed me. Jesus christ loves you and gave his life on the cross so we could live and have a relationship with god. All we have to do is recognize our sins and ask for forgiveness and believe in jesus christ his son.
Thank you Chris!
Will he do my taxes?
My business is a sole prop and I've made less than $400. My husband and I file jointly and since I made less than $400 I didn't know if I was supposed to file or not. Our personal taxes have already been done so what should I do?
You should not show that as income if possible. So therefore I'd hide it and
Great video! Super helpful...Question: What is the minimum amount you have to earn in revenue before you have file for taxes. I just started a small LLC and did not clear 1k in 2020.
Thanks!!
Hey Research Vault!! Sorry it took me a few days to reply, I've been having some issues with getting notified about new comments. I believe the magic number is $400. At that point, technically I think they want you to file, report that income, and pay the self employment taxes (as well as the income taxes). It definitely complicates your tax situation though and could cost several hundred dollars, so I can understand why you might want to avoid it for such a small amount of income. I personally like to do things strictly by the book, but I've heard of other people who are a little more aggressive with pushing the boundaries. For example, let's say you made $600 mowing lawns and shoveling snow and all your customers paid you with cash. You decide not to report that business income. Is the IRS ever going to find out? The chances are infinitely small. Would I do something like that? Nah. But I've certainly met people who might.
Biden recently passed a law requiring you to file if you have made over $600 through any payment platform (PayPal, Venmo, etc)
IF I HAVE A SMALL CLOTHING business what all can i file on my taxes
Great question! Any expenses you have like advertising, website design, and prototype costs could surely be deducted!
Where can I find the forms for filling?
Hey Reese, thanks for watching! If you do a Google Search for the form number, one of the first results should be the IRS website with the appropriate form.
Do we pay for taxes in our business account or personal account? As a sole prop
Great question! Because it's you paying your personal taxes (since the income of your business is technically just your own personal income) I would transfer any money needed from the business account to my personal account, and then pay the taxes from my personal account. If you did it the other way around though, I don't think it's too much of an issue!
What if it March and I have my business and personal finances in the same bank accounts?
Hey Katherine!! Thanks for watching, that's a great question. It mainly depends on how you've structured your business from a tax perspective. If you've got an LLC and you've elected to be taxed as an S-corp, then March 15th is the deadline for filing your business taxes. But based on your question, I suspect you may be operating as a sole proprietorship or as a non-S-corp LLC. In that case, you still have until April 15th to get things sorted out. What I would recommend doing though, is opening a separate business bank account to use for all of your business income and expenses. That'll keep things from getting tangled up in the future. For now, you might just have to work a little bit extra to make sure it's all untangled properly. If I can be of any further help with this let me know!! :)
@@PracticalPersonalFinance Thank you so much for your help! I probably should have said this before but, I was claimed on my father's taxes for 2020 but I started an art business and I'm considering claiming myself and my business for 2021, but I have not registered my business yet and I'm trying to figure everything out! A little stressed about it too
Awesome! Well congrats on starting your own business!! First things first, I would suggest making sure your father is not claiming you as a dependent on his 2020 tax return (the one due April 15th, 2021). If you're filing on your own, you cannot be claimed as a dependent. If you haven't formally registered your business, you're operating as a sole proprietor, which is completely fine! Once you know your serious about it, I would suggest looking into registering as an LLC with your state to protect yourself in case of any legal proceedings - but no rush on that. I would also suggest enlisting the help of a local CPA to help you get your tax return done including the income from your business if your business income in 2020 was more than $400 - less than that and you do not need to file for self employment income!
I wanna file tax 1040
Hey Muhammad, I made another video about filing taxes for the first time that covers this very topic. I highly recommend checking it out!
@@PracticalPersonalFinance Hello where you post the video
Here's a link: ua-cam.com/video/LCLoNOAq0J8/v-deo.html
Paying taxes is tax fraud 🤣