Taxes, Demystified

The thing everyone dreads, in plain English. What you owe, when it's due, and how to keep it from biting you.

  1. Income tax: you're taxed on profit, not everything you take in: Start with the relief: as a sole proprietor or single-member LLC, your business doesn't pay income tax on its own — the profit 'passes…
  2. Self-employment tax: the one that surprises everyone: This is the one nobody warns you about. At a job, your employer quietly paid half of your Social Security and Medicare. Now you're both the…
  3. Estimated taxes: pay as you go, four times a year: Because no employer withholds tax for you anymore, the IRS wants its share throughout the year instead of one giant bill in April. If you…
  4. Employment taxes: the moment you hire someone: The day you bring on your first employee, a new layer shows up — payroll taxes. You withhold income and Social Security/Medicare from their…
  5. State and local taxes: know your own backyard: Federal is only half the story. Depending on where you operate, you may owe state income tax, sales tax, city or county taxes, and maybe a…
  6. Record keeping: the boring habit that saves you: Nearly every tax headache traces back to messy records. Good records mean you claim every deduction you've earned, you can prove it if the…
  7. Accounting basics, without the jargon: You don't need to become an accountant — you need just enough to make good calls and talk to one. Two ideas cover most of it: whether you…
  8. Where to get real answers (free): When you have a specific tax question, you want the source — not a random forum thread. The good news: the IRS and the SBA/FDIC publish…
Bizer
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