Quote:
Originally posted by Greenguy
I could be mistaken, but here in the US, if you don't pay quarterly, thus sending the gov't NO money until tax day, they fine you because you are supposed to pay in as much as you did the previous year.
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I'm not an accountant, and I don't play one on TV, but, my understanding is:
if you owed taxes last year, you need to pay estimated tax equal to or greater than 90% of your tax amount in the prior year to avoid penalties. Playing Catchup on Jan 15 to try to avoid penalties usually doesn't work -- been there, done that.
Quote:
Originally posted by [BV]
If you solely own an unincorporated business then you are required to pay income taxes each quarter.
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Well, not quite. It still depends on your tax debt the year before. And, you can file estimated taxes based on the way the money came in. So, if you receive a lot of money in one quarter, you can pay based on that. There's nothing that says you cannot pay monthly or every other month. I just prefer not to give the Govt a 0% loan on my money. I have better uses for the money.
If you are incorporated, you can write yourself an annual salary check, and pay taxes once per year. (This is rather unmanageable
)
However, the best advice I can give:
If you are doing ANYTHING where you are earning money in the adult industry, especially if it is your sole income source, get a damn good accountant! The benefits for having an S-Corp (or some other tax structure) far outweigh the few $$ you'll spend on a good accountant.
Find one that is comfortable with Quickbooks, buy yourself a copy of Quickbooks. Tell them up front that you work in the Adult Website business -- don't try and sneak past them. Some people have an aversion to the adult industry.
Quickbooks is pretty easy, it can be imported right into their tax preparation software and your tax forms filled out. I can tell you, there are no less than 40 forms that have to be filed every year for one of my corporations, and there is no way I could remember or keep up with it or know which ones to file.
Every quarter, I send my quickbooks files, every October (this time in November) we review the numbers, look at the projections, figure out what purchases that can be made to reduce the tax burden. Thank you George Bush for that extra-special rapid depreciation on new equipment! While I don't think it will help the economy, it did help me get some equipment I had been putting off.
Overall, based on the phone call in November, I believe I reduced my April tax burden by about 70%. I didn't go into debt, I just accelerated a few purchases I was going to make anyhow.
At this point, you can't do much with 2004's income/taxes -- other than slap money in an IRA if you haven't and take the tax break (unless you do a Roth).
Yes, you can do your own taxes, but, tax planning is pretty complex. And as I found this year, it saved me a heap of money just by altering the timing of things I was going to do.