What % Do You Hold Out For Taxes?

[SandeeAR]

I saw some one post they held out 15%. I was told to hold out 25-30%. Just wondering what most of you hold out? I no longer have children living at home, so no child deduction here.

[Jewels]

I'm not really doing a %, I'm just doing $400, but in reality, I put more than that in savings every month anyways, but $400 every month I strictly setting aside for taxes, my monthly income in $3600, so thats not nearly 15.3% I figure I have at least $500 in deductions every month, and that doesn't include meal allowance, but just subtracting $500 from $3600 makes $400 pretty close.........And I figure that $400/month will be plenty come tax time. and anything extra, is like a tax refund for myself.(but would just stay there)

[actaktmdt]

I used the 30% rule but 2010 was my first year in business so maybe it was too much.....

[TomCopeland]

Tax Withholding

It's difficult to know what percentage of your income to set aside for taxes because everyone's business and personal lives are different. As a rough rule of thumb I would set aside 20% of your gross income (parent fees plus food program reimbursements). This should cover you for federal income taxes and social security taxes. You need to set aside more for state income taxes.

[Abigail]

When I open my daycare, how do I "set aside" money or pay taxes throughout the year?

[TomCopeland]

Set aside taxes

If you are single you must file Form 1040ES Estimated Taxes quarterly. The first payment for 2011 is due April 18, then June 15, Sept 15, and Jan 15. If you are married you spouse can withhold more through his employer to cover your taxes. Otherwise you should file the same quarterly estimated taxes.

[Abigail]

If you are single you must file Form 1040ES Estimated Taxes quarterly. The first payment for 2011 is due April 18, then June 15, Sept 15, and Jan 15. If you are married you spouse can withhold more through his employer to cover your taxes. Otherwise you should file the same quarterly estimated taxes.

Do I find these forms online? My husband works full time. Is there a certain time during the year that we will have to change how much is held out or can he just go ahead and do that once I open my daycare? If I decide to pay in quarterly, where do I find the form and who do I write a check to/send it too?

[MissAnn]

I put away my food program money in a special account. It pays for my taxes and part of a yearly conference and hotel.

[TomCopeland]

Estimated Taxes

You can get the estimated tax form (Form 1040ES) at www.irs.gov. I've also posted it on my blog: http://www.tomcopelandblog.com/irs-t...lications.html

Write the check to the US Treasury.
You can always have your husband withhold extra money from his paycheck right away, or wait til after you start earning money.

[misol]

I put away my food program money in a special account. It pays for my taxes and part of a yearly conference and hotel.

MissAnn, this sounds like a good idea!