| as your enthusiasm about finally making some money | | | | paying self-employment tax, if your net income was at |
| in your home based business is beginning to build, in the | | | | or below $399. At this point it is still considered hobby |
| back of your mind the nagging worry about the tax | | | | income and will not be subject to the tax. |
| ramifications that your sudden income will generate | | | | If in doubt, you will be wise to invest some time and |
| cannot be denied. Sure, you probably read up on tax | | | | money and visit with your friendly neighborhood |
| liabilities, but more than likely with an eye to tax | | | | accountant who should be able to give you some tips |
| deductions rather than self-employment tax. | | | | as to what you might have to look forward to when |
| Self-employment tax rules for the fiscally challenged | | | | the taxes come due. In addition to the foregoing, |
| are by no means all-inclusive, but they do provide a | | | | investing the time now and discussing monies owed as |
| good rule of thumb that helps you understand how | | | | well as allowable expenses with your tax professional |
| much of a hit you can expect Uncle Sam to take. | | | | will prevent you from claiming – or attempting to |
| When you are in business for yourself this is very | | | | claim – deductions for which you either do not |
| important information to have and understand. | | | | qualify or only have a limited and conditional claim. |
| Many a myth has sprung up around self-employment | | | | Those who are truly fiscally challenged usually opt to |
| taxes, but in essence they are little more than your | | | | have a tax preparer handle their business taxes at |
| paying into the social security and also Medicare funds. | | | | least during the first year so as to ensure that each |
| In the past, you saw these deductions on your | | | | and every schedule is included, the majority of |
| paychecks. | | | | deductions makes it into the return, and a good starting |
| At this point in time, your self-employment tax rate | | | | record is established that may serve as an example |
| – regardless of income below $94,200 – is | | | | for the coming year when the entrepreneur might try |
| set at 15.3%. | | | | to go it alone. Since the money you spend on a |
| A much-overlooked rule dictates that you are | | | | professional tax preparer is deductible, it is indeed a |
| supposed to pay your estimated self-employment tax | | | | wise expense! |
| throughout the year. This is true especially when you | | | | As you can see, the self employment tax is not really |
| find at the end of the last year that you owed taxes | | | | something to be dreaded and feared, but it is a tax |
| – of any kind – exceeding $999. Estimated | | | | that must be paid and when you fail to make |
| tax payments may be made during the year and thus | | | | estimated payments throughout the year, you will find |
| will ease the hit you may take at the end of the year. | | | | that the end of the year hit may be especially hard to |
| Interestingly, if you just started out with your home | | | | take. |
| base business, you might be able to get away with not | | | | |