[ale] [OT] sole proprietary taxes

[James P. Kinney III]

On Tue, 2003-04-15 at 08:17, Jason Vinson wrote:
> I have a question for the self-employed (contract work/sole proprietary) people out there.  I am trying to file my quarterly taxes and I have found the two forms I think I need to fill out, but I wanted to check with others who may be more experienced in this arena.  I have two questions:
> 
> 1.) Is it required to pay quarterly taxes when you are non-incorporated?

It depends on the amount owed. If the tax owed exceeds a magic amount,
you are required to fork it over. The idea is to "pay as you go" which
allows cash flow for the govs. The real hassle begins if you have
someone working for you. Then you have to pay in the taxes withheld on
their check at whatever schedule is determined by the amount owed. Small
shops (less than 10) can usually pay on a monthly basis. Some huge
corporation have to cut a check every 2 days to account for the
accumulated tax liability in a 48 hour period.

> 
> and
> 
> 2.) Are the forms for Sole Proprietary taxes 500 ES (for state) and 1040 ES (for federal)?  And am I missing anything else?
> 
I think the ES forms are for EStimated taxes. "That route leads to
madness".  Sole-proprietorship taxes generally use schedules that are
appended to the 1040 form. 

A recommendation: Incorporate yourself as an LLC. It's easy, fast, cheap
and protects you personally from the rare schmuck who wants to ruin
small businesses and independents. As long as you only have yourself on
payroll, the feds treat you as a sole-prop (no corporate tax
paperwork!).


> TIA,
> Jason
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-- 
James P. Kinney III          \Changing the mobile computing world/
CEO & Director of Engineering \          one Linux user         /
Local Net Solutions,LLC        \           at a time.          /
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GPG ID: 829C6CA7 James P. Kinney III (M.S. Physics) <jkinney at localnetsolutions.com>
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