Discussion:HELP! growing out of a Sch C business
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| {{ForumReplyPost|UserID=Kevinh5|Date=31 March 2007|Text=She won't be upset if you tell her how successful she is, She already knows how much more she has been putting in the bank. She is no dummy.}} | {{ForumReplyPost|UserID=Kevinh5|Date=31 March 2007|Text=She won't be upset if you tell her how successful she is, She already knows how much more she has been putting in the bank. She is no dummy.}} | ||
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| + | {{ForumReplyPost|UserID=MsTwizz|Date=31 March 2007|Text=Her self employment tax is $12,632}} | ||
Revision as of 20:44, 31 March 2007
Discussion Forum Index --> Tax Questions --> HELP! growing out of a Sch C business
| 31 March 2007 | |
| Hey everybody,
I think I'm in over my head on this one. It's a simple Schedule C, but my client's business is growing fast. She owns a very successful hair salon. When I figured her taxes this year, she owes $27,000! There's no way! Last year, she earned only $100,00 less and only owed $3,600!!!! I am thinking of taking it to another tax accountant, have them look it over, and let me know what they think? and I am willing to pay for that. Is this wrong? Would any of you be interested in checking my figures? Also, I am wondering if it is time that she turn her business into a S- corp or C corp (she may be making too much money to be an S-corp). The Self-employment tax is killing her! Thanks! | |
| March 31, 2007 | |
| Did you check for typos? Earned $100 less last year, and she owes $23,400 more this year? Hmmm... | |
| March 31, 2007 | |
| The word "only" led me to believe the comma should have been a decimal, especially with only two zeroes after. | |
| 31 March 2007 | |
| Yes, I checked this over and over again.
Look! last year: gross income $460,967 expenses" $441423 net profit $19,544 this year: gross income: $563,202 expenses: 473,804 net profit: $89,398 | |
| 31 March 2007 | |
| yea, sorry.....forgot a zero $100,000 less
It looks like her income is going up and her expenses are not going up in proportion with her income....is there a better taxable entity she should be in. Her business is going to keep growing! | |
| 31 March 2007 | |
| no eitc, more SE tax, seems right to me
She should be proud to have such a profitable business! But, yes, I'd talk about S corp now. | |
| 31 March 2007 | |
| Man! I'm so scared to break this to her! She's going to have a heart attack!!!! :o) | |
| 31 March 2007 | |
| They are taxing her on her profit...sounds about right to me...the SS portion of the SE tax is 11085.36. (I'm too fried to remember much of anything other than take the net (.062) and multiply by 2) S-Corp definate possibility. | |
| 31 March 2007 | |
| o-k, thanks guys.... I'll go in prepared with some solutions for the future! | |
Sierrafc.com (talk|edits) said: | 31 March 2007 |
| If you are specifically talking self employment taxes I would say 30% of taxable business income seems high. The self employment tax is 12.4% for OASDI which caps out at $94,200, and 2.9% for Medicare which does not cap. How can you be at 30%? (Tax $27K / Profit $89K = 30%).
R.S. | |
| 31 March 2007 | |
| She won't be upset if you tell her how successful she is, She already knows how much more she has been putting in the bank. She is no dummy. | |
