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| *Loan,banking and credit>>>tax advice |
Hel need advice thinking of giving up my 1 year biz because of high taxes made about 50k? |
Hi everyone we own a pool service biz and made about less than 50k in profits and my new accountant without reviewing everything says that we might need to pay about 9K, I was shocked since i thought the first year we didn't have to pay much since we really didn't make much, we actually refinanced our home to start the biz and now the payments are so high that we are close to foreclosure,and now he gives us that bad news, i am so dissapointed and thinking if its worth having a small biz because this year has been so tough and if we did make aournd 50k we will have to pay so much back, is this how it usually goes? The self-employment tax can be a burden. The tax is 15.3% of your net profits from your business. This is in addition to federal and state taxes due on your income. I dont know if your accountant mentioned it, but for what its worth, if you set up a SEP retirement plan you could make tax deductible contributions which would reduce your tax liability. You could still make contributions for 2006. Not always, and it does sound a bit surprising. Honestly, there are so many factors to consider in your situation that only more detail could help. You might want to consider taking your information to another accountant, hopefully one that might offer you a free or reduced rate consultation (and that does happen). Quite possibly, your current tax accountant missed out on something important. But if not, then I'm guessing the issue might be something like self employment taxes Best of luck! Taxes can be a burden to the self employed; however, if you are going to make money, you are going to have to pay taxes. If this is the case, it sounds like you may be in a cash flow pinch and need some financial consulting (either business or personal). If you trust your tax advisor, a sit down with them could help. |
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