Whether you have started a new business this year or have had your small business going for several years, you are going to have to pay some taxes if a profit was made. How much you will pay will be determined by what form of business you have and how much profit you made during the year. A small business calculator can help you determine how much you will need to pay.
If you are a business owner that is a sole proprietor, you will likely report your profit on a schedule C. Other business types, such as a partnership or an S-corporation will also pay taxes on their personal tax forms. Since you may not have paid any taxes during the year, it will all need to be reported at tax time. If you have other income that did not have any taxes taken out of it, you will need to report all of it on your personal tax form.
When tax time comes around on April 15, you do not want to be caught unable to pay them. You will need to estimate your tax liability in advance and start putting money away for it. A tax calculator can help you figure out your taxes but you must have the figures needed so that you can enter them on the calculator.
You will need to know about how much you will make for the year. You can use last year's income if you expect to make about the same or project your current income so far for the year and estimate how much you expect to make for the whole year.
You will also need to estimate what your business expenses for the year are going to be. This includes all deductions for your business. If you paid any employees more than $600 for the year, you will also need to file a 1099-Misc for each.
At the same time, you will also need to know about your personal taxes. Other income needs to be added, credits, personal deductions, exemptions, and how much tax has already been withheld – if any.
Social Security and Medicare
Business owners also need to pay all of their Social Security and Medicare payments. If you were an employee, the employer would pay half. Since you own the business, you will have to pay all of it yourself. This means you will need to pay an additional amount for Social Security and Medicare, which is 15.3%
When you have a small business that will owe more than $1,000 in taxes, the IRS wants you to make quarterly payments. They will have to be calculated and sent by specified dates. Along with it, you will also have to send the necessary amounts withheld for any employees.
Calculating your business taxes can be done easily with the small business calculator at Taxfyle (https://www.taxfyle.com/small-business-tax-calculator/). You can select your specific type of organization, enter your revenue, subtract your expenses and any tax payments you have already made, and come up with the estimated amount of taxes still owed.