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Senior Explorer **

First year business tax filing

Hi,

I'm a new small business owner [Feb '19 start date] and can't find definite answers to tax filing related questions. I'd appreciate some clarifications from experienced business owners.

Sole proprietor, selling services and products, based in CA, married filing jointly, spouse employed, using QB Pro for desktop Mac.

  1. I understand that I have to pay quarterly estimated taxes.
    Since filing status is MFJ, do I need to file just 1040-ES for the business side?
  2. It appears that any TT desktop application includes schedule C and SE. Also, I understand that any TT application can import data from QB desktop company file. Which TT version would you recommend for filing quarterly?

Thanks in advance for any advice related to my questions.

Solved
Best answer 03-06-2019

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Established Community Backer ***

Re: First year business tax filing

2. I would not use any TT version to file your quarterly taxes. The IRS offers a FREE efile epay of these and sure as shootin intuit probably has a convenience fee.

 

1. The estimate form is for you as a taxpayer, meaning in your case MFJ.  There is a free calculator as well at irs.gov. You declare based on W2 and projected business profit what your total estimated taxes will be less the amounts being withheld at work, divided by 4. It is a once per year declaration that can be modified each quarter. 

 

Keep in mind that whether you file and pay estimates or not you will not be hit with overpayment penalties if you have withheld an amount equal to last year's (2018) total tax or 90% of this year's tax (2019)

 

An example of this, 2 people each make $50k and have enough taken out to cover taxes, a side business whose net profit is $10k, not counting SE tax of 15.3% you would have satisfied the 90% rule regarding withholding.

 

However if like many where the new withholding rates are insufficient just for wages you might want to mail in 100% of your side business profits to cover your collective behinds, although if you rely on the IRS calculator and can prove it you should pass any audit

2 Comments
Highlighted
Established Community Backer ***

Re: First year business tax filing

2. I would not use any TT version to file your quarterly taxes. The IRS offers a FREE efile epay of these and sure as shootin intuit probably has a convenience fee.

 

1. The estimate form is for you as a taxpayer, meaning in your case MFJ.  There is a free calculator as well at irs.gov. You declare based on W2 and projected business profit what your total estimated taxes will be less the amounts being withheld at work, divided by 4. It is a once per year declaration that can be modified each quarter. 

 

Keep in mind that whether you file and pay estimates or not you will not be hit with overpayment penalties if you have withheld an amount equal to last year's (2018) total tax or 90% of this year's tax (2019)

 

An example of this, 2 people each make $50k and have enough taken out to cover taxes, a side business whose net profit is $10k, not counting SE tax of 15.3% you would have satisfied the 90% rule regarding withholding.

 

However if like many where the new withholding rates are insufficient just for wages you might want to mail in 100% of your side business profits to cover your collective behinds, although if you rely on the IRS calculator and can prove it you should pass any audit

Senior Explorer **

Re: First year business tax filing

Hi John

Thanks for taking your time to answer my noob questions.