If you make X dollars and subtract Y for expenses on average for the year what = Z that is the amount of taxes you owe? In general on average past few years. I’m curious because this will be the first year I owe.
12-15% for a rule of thumb
meaning a simple way to keep track is to look at how much you are taking for personal (your income) and divide by .88, subtract the difference and that’s what you need to stow away
because you already spent it, so you have to get to the higher number the tax would have been taken off of
since what you pay tax with is taxed (the two together are your total gross income)
you may still owe but it wont be much relatively speaking
example:
50k you spent on personal income, but its gone, you need the money to pay the tax on that
/.88
=56,818
so 6,818 is what you need to have socked away
why not just take 50k * 12%? because that’s only $6,000, your 818 short, why? because you need to pay tax on that additional 6k that is paying for the tax
so you need to find the whole number that when the tax is taken out its all covered
so divide, dont multiply
careful with sole proprietor filing, there’s some landmine threshholds where the net tax % jumps considerably with no warning
get a good accountant and they will tell you what YOU need to be doing
Well I have a tax guy and my new Customer Factor tracks income and expenses, I was just curious how much guys made and what they spend on taxes.
including all taxes, about 30%
to help me get the answer im looking for ladies and gentleman if you feel comfortable give me actual numbers based on your income.
I thought Bruce did pretty well with an answer.
John K Wyatt
All Washed Up Tulsa
Thats what you get for thinking. My actual question was intended to have actual numbers so he didn’t actually answer my question so i altered the way it was asked hoping to get real figures from others.
My bad. I didn’t realize you were mentally challenged. Good luck.
John K Wyatt
All Washed Up Tulsa
there will be a range, it will depend on dependents, homeowner write offs, how filing, business set up, marital status and more, you’re back to asking a tax preparer who has seen enough variables to have a range to tell you
[MENTION=6469]Jaran[/MENTION]
Bruce gave a really good answer.
It is hard to say for sure though. I make sure to always visit with my accountant by December 1st for year end tax preparation. Let him comb through your stuff and predict what you will owe in taxes from there… You have time to take action to limit your liability.
To the War Room both of you…!!!
Lol, my vote for war room!
My only challenge is putting up with you.
I’ll give an example last year my first year in business on my own, I made about 40k had 25k in writeoffs and tax credits I got a refund of about 2000 in subsidies. Ok [MENTION=1]Chris[/MENTION] Bruce did give a great answer to a different question. I must have worded it wrong, I just want other real examples from others. I will obviously get a tax preparer to help me but I’m just curious what everyone here pays not trying to figure out how to calculate it.
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What did you say your companies legal structure is?
llc
what do you mean you got a refund of about 2k in subsidies?
A refund implies you over paid your quarterly taxes.
Subsides = [I]subsidy[COLOR=#777777][FONT=Times New Roman] |ˈsəbsidē|[/FONT][/COLOR]noun ( pl. subsidies )
1 a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive: a farm subsidy | they disdain government subsidy.• a sum of money granted to support an arts organization or other undertaking held to be in the public interest.• a grant or contribution of money.
2 [FONT=HelveticaNeue-Light]historical [/FONT]a parliamentary grant to the sovereign for state needs.• a tax levied on a particular occasion.[/I]
The way you are asking these questions is showing your inexperience and lack of knowledge. Worse than that, you are asking a bunch of guys/gals who are NOT accounts, don’t live in YOUR area and don’t run YOUR business - get an accountant and ask him/her your questions.
Make sure you choose an accountant that specializes in small business accounting and has a good reputation, they are not all created equal.
Yes Sir!
You are not going to get “actual numbers” from anyone. Primarily, it is none of your business what someone else’s numbers are to answer your question.
Everyone’s actual numbers are different depending on a multitude of factors, many of which have been mentioned here. I am an Enrolled Agent and I don’t know what a write off is. However, your ignorance about the topic would be a different thread.
The quick version for you;
What is your Filing Status and how many Exemptions can you claim? Write it down, it will be needed later.
Now we start with Income.
The 16th Amendment to the Constitution says, [COLOR=#000000][FONT=Tahoma]The Congress shall have power to lay and collect taxes on incomes, from whatever source derived,
This means all the money, or things of value you took in. Once you have listed everything, you can add it up to get Total Income.
From Total Income you get get to deduct certain expenses. There is a list of allowable deductions and the IRS will provide you with Publications that enumerate these deduction. When you deduct these expenses from Total Income, you get Adjusted gross income(AGI).
From Adjusted Gross Income, you deduct your Personal Exemption(s) based on the number of people living in your house or you support, and then enter either the Standard Deduction (based on Filing Status) or If you have enough, you can itemize deductions (based on the total of your personal Exemptions and Deductions). This calculation will give you your Taxable Income.
Once you have your taxable income, you can go to the tax table and find the Tax you owe, and if you owe any Alternative Minimum Tax (AMT)
Now we get to Credits. Credits reduce the tax you owe dollar for dollar. There are a list a credits you are allowed to deduct, such as Child, Education, retirement savings, residential energy…etc.
After the Credits, you get to deduct other taxes you have paid in like Self-employment tax, taxes paid on IRA’s or other retirement plans, foreign taxes…etc. There is also a list of these taxes. Once these have been deducted, you get the Total Tax you owe.
Somewhere during the year you have made tax payments to the government for various amounts. Withholding is one type of these payments. you total these payments with any EITC (earned income tax credit) you might receive and deduct these total payments from the tax you owe. If the payments are greater than the tax, you get a refund. If not, you owe.
Everyone fills out these items differently. Two people who made the exact same total income, may get different results. One could get a refund and one could owe.
This is why your question cannot be answered by using “actual numbers” from anyone. You can only get a range or estimate
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