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  • Taxes and Income

    So depending on how much you are paying yourself an hour, how are you determining how much you would need to additionally make to pay taxes and put back?

  • #2
    %30 in your pocket %70 back into the business. Turn in finances at years end "quarterly if required" send in money order with payment voucher. The 70/30 system has worked good for me in many ventures. If your business is managed properly and you are putting 70% back into it you should have no problem paying taxes by 4/15. My lawn care taxes last year only came out to $207.00 but it was my first year, I only made back my investment plus about 1K. so its a little more than 20% I was taxed by the state. because of right offs and credits on the federal side I broke even.
    White Company

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    • #3
      So depending on how much you are paying yourself an hour, how are you determining how much you would need to additionally make to pay taxes and put back?
      Are you referring to income tax for monies you paid yourself per month or income tax on net earnings for the company for the year?
      Andy
      Halifax, Nova Scotia

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      • #4
        Well technically, it would the percentage of what you would pay your self. Oh and what is a good rate to pay your self an hour if you are just starting to pay your self, after you finally break even in the ol bank account?
        Last edited by adamsmowing88; 03-03-2010, 07:03 AM.

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        • #5
          incorporated?

          how much taxes you pay depends on how your business is set up. If you are a sole propiertor or an LLC, then you claim your income on your personal tax return.

          If you are incorporated then it's different. you pay taxes on the company's income and on yours as well. the money gets taxed twice.

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          • #6
            Well technically, it would the percentage of what you would pay your self. Oh and what is a good rate to pay your self an hour if you are just starting to pay your self, after you finally break even in the ol bank account?
            You can pay yourself as much or as little as you want. I don't know if there is a % you should be shooting for with that.

            If you are running a sole proprietorship. Every dollar that comes in is your money that you have to pay expenses out of and taxes out of and so on. So ideally you want to keep the positive cash flow as high as possible and the negative cash flow as low as possible, to maximize your income.
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            • #7
              check this

              I think this link will help you out a lot.

              http://www.calcxml.com/do/inc05?skn=#results

              it tells you how much tax you will pay based on your income. then you can plan on saving accordingly.

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              • #8
                FICA 7.65% paid by employee and business (so a total of 15.3%)
                Fed. unemployment .8%
                State unemployment 2.7% (this is for FL your state may vary)
                Fed. Income tax is based on income
                0-8350 10%
                8350-33950 15%
                33950-82250 25%
                82250-171550 28%
                171550-372950 33%
                372950-above 35%
                You will have to check on your states income tax we do not have that in FL
                here is a calculator that will give you a pretty good idea what you will pay in taxes
                Good luck

                edit: One should note these are based on 2009, there is no telling what the current admin. will do to us next year. GOD bless America, we're going to need it.
                Last edited by ProCut TM; 03-04-2010, 03:35 PM.

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                • #9
                  That is a great post and the calculator will be very helpful to many as well.
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