taxes - GoFuckYourself.com

kylesk · 06-05-2021, 08:04 AM

Well.. for US people : )

I know... ask a CPA.

Figured I would ask here first because I know most of you own your own businesses. Early this year I started my own single member LLC.

So my first question.. is it normal for you to spend pretty much all of your profits and reinvest into your business the first year? Web hosting, hard links, software.. pretty sure I can write all that off. Right now all of that is more than my profit so far. I take 30% of every income and put it into a business savings account.

Do you pay quarterly taxes or just once with your personal taxes? I didn't bother paying the first quarter since I spent more on my business than I made.

Also.. if quarterly, how in the heck do you estimate? In this business you can make a killing on one quarter and then make jack shit in another.

Thanks

Sly · 06-05-2021, 08:11 AM

Your first question is more of a business question. Many reinvest all monies earned, or at least should.

If you don't pay quarterly, you'll just have to pay a penalty. Up to you as to whether or not it's worth it.

It's an estimate for a reason. :-) The main point behind it is for the government to get your money before you have the chance to spend it on something else. I'm not a fan of the government having my money any longer than they need to...

Ultimately, do what makes the most sense for you on all 3 questions. Even if you make no profit due to reinvestment, the government really just wants a note saying that. You may as well get in the habit of doing it quarterly now to save you trouble later on.

Also... LLCs are common I think because they are so easy to set up and understand, but S Corps are typically better, especially when you want to start paying yourself. You can tax the LLC as a S Corp, but that's accountant/CPA/tax lawyer stuff. As soon as you start making any money, get a professional to set you up with a plan that works best for your situation.

EroMediaGFX · 06-05-2021, 01:40 PM

You shouldn't pay a penalty for not paying estimates your first year. If your expenses are more than your profits right now I wouldn't worry too much about it until the next tax season.

CurrentlySober · 06-06-2021, 08:35 AM

the only taxes that i'm into are the ones that drive me from bar to bar

V_RocKs · 06-06-2021, 11:06 AM

A lot depends on which state you live in.

First part. It's normal to invest in the business. What you are describing aren't so much tax write-offs as they are costs of doing business and therefore will be in the expenses section of various forms you will file.

So if your business did $10k in profits, but you spent $12k in hosting, design fees, traffic buys, etc, you actually get to deduct 2k from your gross income from your day job.

If you do turn profitable you are supposed to pay quarterly. Just pay in a profitable quarter. As for the penalties for not paying on time... They are generally pretty low. At least from my perspective.

Let's say that last year I owed $90,000 to IRS and $27,000 to California. And let's say that I paid IRS $45,000 throughout the year and state $15,000... But then I put the rest into a mixture of doge, BTC and eth token coins. And it made $70,000 in profit.

Now I owe $768 to IRS for not paying enough in quarterly and $286 in California. So it cost me a grand to make $69,000 or so in profits.

However, if you don't have a lot of capital yet for investing, those penalties and fees can sting a bit. But they aren't massive by any means.

DukeSkywalker · 06-06-2021, 11:13 PM

Quote:

Originally Posted by kylesk

Well.. for US people : )

I know... ask a CPA.

Figured I would ask here first because I know most of you own your own businesses. Early this year I started my own single member LLC.

So my first question.. is it normal for you to spend pretty much all of your profits and reinvest into your business the first year? Web hosting, hard links, software.. pretty sure I can write all that off. Right now all of that is more than my profit so far. I take 30% of every income and put it into a business savings account.

Do you pay quarterly taxes or just once with your personal taxes? I didn't bother paying the first quarter since I spent more on my business than I made.

Also.. if quarterly, how in the heck do you estimate? In this business you can make a killing on one quarter and then make jack shit in another.

Thanks

Pay another company you create to manage the LLC and take payroll. You can tax the llc as an s

06-05-2021, 08:04 AM	#1
kylesk Confirmed User Industry Role: Join Date: Jun 2015 Posts: 92	taxes Well.. for US people : ) I know... ask a CPA. Figured I would ask here first because I know most of you own your own businesses. Early this year I started my own single member LLC. So my first question.. is it normal for you to spend pretty much all of your profits and reinvest into your business the first year? Web hosting, hard links, software.. pretty sure I can write all that off. Right now all of that is more than my profit so far. I take 30% of every income and put it into a business savings account. Do you pay quarterly taxes or just once with your personal taxes? I didn't bother paying the first quarter since I spent more on my business than I made. Also.. if quarterly, how in the heck do you estimate? In this business you can make a killing on one quarter and then make jack shit in another. Thanks

06-05-2021, 08:11 AM	#2
Sly Let's do some business! Industry Role: Join Date: Sep 2004 Location: Austin, TX Posts: 31,242	Your first question is more of a business question. Many reinvest all monies earned, or at least should. If you don't pay quarterly, you'll just have to pay a penalty. Up to you as to whether or not it's worth it. It's an estimate for a reason. :-) The main point behind it is for the government to get your money before you have the chance to spend it on something else. I'm not a fan of the government having my money any longer than they need to... Ultimately, do what makes the most sense for you on all 3 questions. Even if you make no profit due to reinvestment, the government really just wants a note saying that. You may as well get in the habit of doing it quarterly now to save you trouble later on. Also... LLCs are common I think because they are so easy to set up and understand, but S Corps are typically better, especially when you want to start paying yourself. You can tax the LLC as a S Corp, but that's accountant/CPA/tax lawyer stuff. As soon as you start making any money, get a professional to set you up with a plan that works best for your situation. __________________ Vacares - Web Hosting, Domains, O365, Security & More - Paxum and BTC Accepted Fully Managed VPS, Daily Backups Included - Starting at $25. Contact for more info. Sell me your: Paysites and Hosting Company. Buy my: Aged Domains and Sites

06-06-2021, 08:35 AM	#4
CurrentlySober Too lazy to wipe my ass Industry Role: Join Date: Aug 2002 Location: A Public Bathroom Posts: 38,120	the only taxes that i'm into are the ones that drive me from bar to bar __________________ My AI Handywork... My Dream Gal... XXX 👁️ 👍️ 💩

06-05-2021, 01:40 PM	#3
EroMediaGFX Registered User Industry Role: Join Date: May 2021 Posts: 14	You shouldn't pay a penalty for not paying estimates your first year. If your expenses are more than your profits right now I wouldn't worry too much about it until the next tax season.

06-06-2021, 11:06 AM	#5
V_RocKs Damn Right I Kiss Ass! Industry Role: Join Date: Dec 2003 Location: Cowtown, USA Posts: 32,315	A lot depends on which state you live in. First part. It's normal to invest in the business. What you are describing aren't so much tax write-offs as they are costs of doing business and therefore will be in the expenses section of various forms you will file. So if your business did $10k in profits, but you spent $12k in hosting, design fees, traffic buys, etc, you actually get to deduct 2k from your gross income from your day job. If you do turn profitable you are supposed to pay quarterly. Just pay in a profitable quarter. As for the penalties for not paying on time... They are generally pretty low. At least from my perspective. Let's say that last year I owed $90,000 to IRS and $27,000 to California. And let's say that I paid IRS $45,000 throughout the year and state $15,000... But then I put the rest into a mixture of doge, BTC and eth token coins. And it made $70,000 in profit. Now I owe $768 to IRS for not paying enough in quarterly and $286 in California. So it cost me a grand to make $69,000 or so in profits. However, if you don't have a lot of capital yet for investing, those penalties and fees can sting a bit. But they aren't massive by any means.