[ale] [OT!!] sole proprietary taxes

[John Mills]

ALErs -

<GIDDY_BABBLE>
On Wed, 16 Apr 2003, Transam wrote:

> On Tue, Apr 15, 2003 at 08:56:05AM -0400, James P. Kinney III wrote:
> > 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?

> Basically, you must pay at least 90% of the taxes due on the amount
> earned each quarter.  Whether or not you're incorporated and whether
> you treat yourself as a subcontractor ("1099") or employee ("W2")
> does not matter.

DISCLAIMER: I Am Not A Tax Lawyer Or An Accountant! (IANATLOAA!)
If you have 'self-employment' earnings and have not had the appropriate 
Social Security taxes withheld, you also pay the self-employment tax 
intended to make this up. (Form SE-*).

> You are far better off paying an accountant to do this for you for the
> first year than risking far higher IRS penalties and MAJOR**2 hassles
> trying to get problems straightened out.  I can recommend my accountant.

I won't dispute that advice, but I do think there's a gray area (of user
need, not tax obligation!). After several years of filing for secondary
outside sources of income for myself and my wife, I think I have made the
transition to primary self-employment tax-filing with a combination of
'Turbo Tax' decision rules (including telling me a couple of years ago
that my wife needed Form SE-*, then figuring it and spitting it out),
books on the subject (Academic Information Services'
_<YEAR>_Tax_Guide_for_[Engineers|Teachers|...]_ series, along with
_shelves_ of others at most book sellers), _Your_Federal_Income_Tax_ (free
and published annually by the IRS -- my copy came from a give-away stack
at the local DeKalb Public Library), etc.

When I've tried to confirm 'Turbo Tax's recommended choice of forms, the
IRS telephone assistance service was always clueless: it was like dealing
with the usual Tier-I tech support person!

> > > 2.) Are the forms for Sole Proprietary taxes 500 ES (for state) and 1040 ES (for federal)?  And am I missing anything else?
 
> You cannot learn this stuff over a few emails and the IRS web site
> is worthless for this.

Amen - it takes some work. Exprienced advice is good, too. Lots of folks 
around us have 'been there' (and I don't count myself).

> "Microsoft: Unsafe at any clock speed!"
>    -- Bob Toxen 10/03/2002

Yes, well ... now that OpenOffice provides a pretty usable suite of
business applications, 'TurboTax' and getting the best photo prints from
my Epson-740i are the only reasons I have to boot M$Win. I bet the
printing problem can be solved, but I'm not optimistic about TT.

_Now_ I need to dig through the 'ground-zero' in my office and sort the 
remains of this year's tax records. Just opening the door will be tricky!

</GIDDY_BABBLE>

Cheers on TheDayAfter,2003 -
 John Mills
 john.m.mills at alum.mit.edu

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