Personal tax and Business tax

[MelissaP]

I am just starting out and I am wondering how this works when it comes to filing taxes.

What is the usually rate that you pay in for either?

Would I have to have a personal tax if I am the business owner?

Is there a difference between the two?

Thank you,
Melissa

[hwichlaz]

If you’re a sole proprietor, they are one in the same...other then your self employment aka social security tax.

You deducted expenses from your gross daycare reciepts to come up with your business profit. You pay Social Security on that amount....which is also deducted from that total...the result is your personal income for the year, which is then taxed.

[TomCopeland]

taxes

I am just starting out and I am wondering how this works when it comes to filing taxes.

What is the usually rate that you pay in for either?

Would I have to have a personal tax if I am the business owner?

Is there a difference between the two?

Thank you,
Melissa

You will owe 15.3% Social Security/Medicare tax on your profit. You will also owe federal and state income tax (if you state does have state income taxes) on your profit as well. File Schedule C to report your business income and profit. Your profit from this form gets transferred to Form 1040SE to calculate your Social Security/Medicare taxes. Your profit also gets transferred to Form 1040 to pay federal income taxes.

[MelissaP]

Thank you so much! I appreciate all the help!

Melissa