New bussiness?

Question

I want to start my own window washing bussines, I've been looking on line about taxes and related stuff. I live in texas, when I charge the customer for a job do I include taxes on the Ticket? And how do I report my earnings to the IRS?

Answer 1

You do not need to add sales tax to the ticket;  just figure your profit to allow for the 8.25% sales tax bite in Texas.   Some break it down, e.g, if you sell a part.

You send estimated taxes to the IRS, using IRS Form 1040-ES quarterly. Estimated taxes are due April 15 {unless the fifteenth falls on a weekend or holiday}, June 15, September 15 and January 15.

You must make bank deposits before the 15th of the month, every month, for your employees. You deposit 15.3% and withhold 7.65% from every employee. Every quarter, you use Form 941, fill it out and mail it to the IRS. There is also a sheet {known as a voucher} that you can use if you do not deposit enough money toward your self-employment tax in the account set up in your business bank account for the IRS. Sometimes the IRS will send you a notice that you only have to deposit every quarter. However, when I was keeping the books for a business, the IRS instructions made it look like she only had to deposit every quarter because her volume wasn't that high. But I told her to deposit every month as a precaution. It was a good move as she received a notice from the IRS saying they ruled that she has to deposit every month.

You report your earnings by April 15, 2009 on Schedule C, unless you file an extension.  You will also have to fill out an Schedule SE if you make a profit.   Don't go to just any accountant as one answerer said.    If you are comfortable with your bookkeeper, you can use him if he will stay with you.  If you are not comfortable, go to the naea.org website and type in your zip.  You will be able to find an enrolled agent.   Enrolled Agents are professional tax practitioners who have technical expertise in the field of taxation and are licensed to represent taxpayers at all administrative levels before the Internal Revenue Service.  Moreover, Enrolled Agents are the only tax professionals who are required by the IRS to maintain their expertise through continuing professional education.

Whether you're talking about enrolled agents, or run of the mill CPA's, or H&R ripoff, jackson-dimwit, they often charge by the number of forms they have to fill out.  

That's pretty rinky-dink, so there are not many enrolled agents that charge by how many forms they fill out.  When I practiced as an enrolled agent, I charged by how much I used my brain.  And the reason is because I know how to do even the most complex tax situations.  When I sign my name to the return, it means I will back the taxpayer up in the event of an audit.  

Texas is one of 7 states that has no income tax at all to date.     As you have been researching, it is well to start on the IRS website - irs.gov.  Check out Publication 535, 15, 15-A, 15-B and the others that have to do with launching a business, paying employees, etc.

If you choose to pay yourself, you must make bank deposits and pay 15.3% of the monies paid out to your employees, including yourself, if you choose to pay yourself a stipend. You get credit for a little bit more than one-half of the self-employment tax you have to pay on the Form SE. You pay self-employment tax when you file your income taxes. Fill out Schedule SE. The software will do the calculations. The first 102,000 of your profit will be subject to self-employment tax at a rate of 12.4%. There is no ceiling on the medicare portion, which is 2.9%.

Congratulations on being in business! I wish you tremendous success and a minimum of problems.

Answer 2

I don't know anything about taxes in Texas - you need to contact their treasury department or department of revenue or department of taxation or whatever they call in down there.

You will need to go to www.irs. gov and read the following publications - or hire a tax accountant.

The instructions for Schedule C on the 1040 form

Publication 505 Tax Withholding and Estimate Tax

Publication 583 Starting a Business and Keeping Records

Publication 587 Business Use of your Home