Private Practice Archives | TL;DR Accounting

31

Oct

Estimated Taxes, Newsletter, Private Practice, TaxesGetting Started

What are Self-Employment(SE) Taxes?

https://youtu.be/StEiHsOdknM What Are Self-Employment (SE) Taxes? For the sake of argument, let’s say you’re an employee. Since 1990, 7.65% of your paycheck has been sucked into the government’s coffers before you even saw it. Your employer has been doing the exact same amount in tandem by paying 7.65% of your paycheck to the government in payroll taxes for each of their employees. By now you’ve probably done the math: 15.3% of every employee’s paycheck goes to the government right away (up to the annual Social Security cap at least, which in 2019 is $132,900). If you want to get technical,…

Taking Money Out of an S-Corp: Draws vs. Salary

https://youtu.be/VSnRp2qnXkM When you do business in your own name as a sole proprietorship, there isn’t really such a thing as a “salary” or a “distribution.” Clients and customers pay you, you pay taxes, done and done. As long as you keep your personal and business expenses separate, ideally using separate bank accounts, you’re good. As an S-Corporation, suddenly you have a choice to make every time money leaves the company’s “hands” and gets into yours: is it a draw or a salary? Draws Owner draws: Are usually either for estimated taxes, due to a specific event, or from business growth…

How to Pay Estimated Taxes as an S-Corp

https://youtu.be/sGqZ5fJEv94 When you earn money as an employee, you don’t have to make estimated tax payments throughout the year. Or, rather, the estimated tax payments are made automatically by your employer through the withholding process, and these payments that were made on your behalf all year are conveniently reported to you on your W-2. But as an S-Corporation business holder, none of this is automatically done for you. The Process Unfortunately, the annual schedule for estimated tax payments is very strange: Q1 estimated taxes are due by April 15th. So far so good. April and May estimated taxes are due…