How Can You Estimate How Much You'll Owe in Taxes?

[LittleScholars]

This is my first full year operating, and I've done pretty well keeping track of my records. I use quick books to track profit/loss, and I've kept track of the pieces that don't fit in quick books (depreciable assets, major home improvement, etc.).

This year, I don't *think* I'll owe too much, but does anyone have a good system for identifying how much you'll owe (even if it is just a ball park)? I'd hate to think I have a certain amount in savings or to spend and then be stuck at the end of the year!

[midaycare]

This is difficult because you need to figure out your income, then your deductions, and subtract the deductions first.

For example, last year I made close to 50K, but we did a lot of home repair work and spent a ton on daycare. And I have a huge time space percentage (62%). So after all was said and done, my income was only 14K. And I owed almost nothing in taxes.

Completely depends on some big factors. Sorry.

[TomCopeland]

taxes

This is my first full year operating, and I've done pretty well keeping track of my records. I use quick books to track profit/loss, and I've kept track of the pieces that don't fit in quick books (depreciable assets, major home improvement, etc.).

This year, I don't *think* I'll owe too much, but does anyone have a good system for identifying how much you'll owe (even if it is just a ball park)? I'd hate to think I have a certain amount in savings or to spend and then be stuck at the end of the year!

You'll owe 15.3% of your profit in Social Security/Medicare taxes. You will also owe federal and state income taxes on your profit. These taxes will depend on your family's taxable income, so I can't estimate those. If you have withheld about 20% of your gross income that should be enough to cover your federal taxes.

[LittleScholars]

You'll owe 15.3% of your profit in Social Security/Medicare taxes. You will also owe federal and state income taxes on your profit. These taxes will depend on your family's taxable income, so I can't estimate those. If you have withheld about 20% of your gross income that should be enough to cover your federal taxes.

Ok, great! 20% is an easy enough rule to follow. Thank you!