I am going to assume you have gotten your business name registered with your state.
Of note: I know you don’t all live in the United States. I would suggest changing the instructions to fit your country.
I’ll also assume you opened a business checking account in your business name.
Now open an online account with the IRS to pay taxes on your earnings.
You don’t want to end the year in debt to the IRS.
One of the biggest headaches of being a small business owner is paying taxes and worse, owing taxes.
Each year, I receive a small refund. Here’s how:
The IRS wants your money, so they make it simple to pay them directly with their system called EFTPS.
You will sign up on the EFTPS site to pay your income taxes to the IRS.
Here are the steps that I found on their site.
1. Go to the website EFTPS.com
2. On the page that comes up, click on the red box marked ‘Enroll’.
3. Agree to the privacy and paperwork act on this page by clicking the box.
4. At the bottom of that page you’ll see the words: ‘Enroll me as.’ Underneath that are three choices. You will click on the ‘individual’ box.
5. That will take you to a page where you fill out your information. This includes allowing them to debit your business checking account. I have been doing this for at least 5 years without problems.
6. I know you will pick out a username and password at the end.
7. I also know that they will assign you a four-digit pin number. That number is snail mailed to you. I’m not sure how long it will take to receive your pin number. A week or two, I guess.
8. Once you receive your pin, do a test payment. You are prepared if that goes well.
For me I make payments equal to 15% of my take home pay. As my income grows, this will increase.
I make a payment of $60 when my income has hit $400 since I made my last payment.
You can keep a record of your payments. You’ll have an option to save the transaction as a PDF. It wouldn’t hurt to do so, although I have had no problems with EFTPS keeping track of my payments.
Go get this set up so you can keep the IRS happy. You’ll also be happy because you won’t owe the IRS any money at the end of the tax year.
Because I receive social security now, I take very little of the profit of the business to pay for personal items. For example I have maybe taken $800 in profit in the last three months. Instead of paying taxes on so little money I just pay $50/week to the IRS as a just in case.
The rest of the money is a cushion to make sure I always have enough money to pay my employees.
If there is anything left, I buy things that are needed to grow the business.
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