This was helpful - thank you! Quick question... does a sole proprieter have to submit quarterly taxes or can you elect to do it once per year?
In order to avoid paying any penalties, most self employed who net over $400 need to pay on a quarterly basis. There is a form called 1040-ES that you can use to figure out if you will need to pay estimated payments or not and how much.
The way I look at it is if you have to pay SE tax, you should pay it quarterly.
Also be careful about saying you can deduct your yoga clothes..... most work clothing is npt tax deductibale unless it has your business logo on it and is only worn at work. Or else everyone would be deducting suits and yoga pants and saying they never wore it other than work. Not saying you can't, but just pointing this out so others know the guidelines and don't think they have all these deductions and then have a suprise at tax time.
Other than that, great article to fill others in. I feel like this is a topic that most don't understand and you were able to break it down and explain it very clearly.
Thank you for mentioning the clothes. Yes, they are logo based and required uniform to work at my studio. I wish I could deduct all of my yoga clothes!
Thank you for mentioning the clothes. Yes, they are logo based and required uniform to work at my studio. I wish I could deduct all of my yoga clothes, especially the Lulu lemon ones.
See the answer from @JenPM. I submit mine quarterly based upon the earnings I entered in my QuickBooks Self-employed program. Sometimes your CPA will guide you here as well. Mine actually gives me the coupons all filled out with the amounts required (based on the prior year’s earnings). We also have an LLC business and a Sub-S corporation that generates income. Our taxes are a bit complex.
@lynda could you please point us in the right direction to the forms needed for filing self-employed taxes? That would be so helpful! Thank you!
You file schedule C on your 1040 return to show your business earnings. You can actually buy a bundle. QB Self Employed and Turbo Tax to track and do your return and pay your taxes.