WTF this cannot be right why the hell am I being taxed so much?

This is bs, with my internet site I have to pay social security/medical tax, state tax, and business tax which is basically nearly 50% of my earnings. That is fucking bullshit and something has to be wrong since there is no way someone can survive with them taking all of the money. My sites generate a good income but the tax takes so much that I would probably make more money working minimum wage part time. There has to be something wrong.

 

Welcome to the wonderful world of self-employment. Do you think there might be some unrest if all the salaried employees (who's employers pay all these same taxes, but in the background) realized how much money goes to the government?

 

sounds like you are doing something wrong.

so, you cut yourself a paycheck (ss/medicare) and at the end of the year you file your business taxes correct? Uncle sam will eat a lot, but there are ways to reduce your burden. Do you work from home? Expense it to the business. Use your car to go to meetings? Expense it. Go out and eat and "discuss" your business? Expense it.

 

Yeah I understand having to pay taxes but I never heard of anyone being taxed nearly 50%. By the time I pay last years taxes I probably won't be able to afford to pay this year's. There has to be something wrong since I doubt every business owner makes over $500,000 profit a year.

 

Does Europe tax this much as well? After I pay my taxes I may leave the US since this is bs.

 

Stay in US! Where I live (Italy) if you earn let's say 90,000 Euros per year (Net Income) you have to pay around 35,000 Euros. Good luck with that.

Oh and that's just the income tax. Let's not talk about other taxes...or you'll faint. I got to find a way to hide my income

 

First go find yourself a good accountant. They will be able to help you get your taxes in order as well as recommend differnent set ups for you business which should reduce your tax liability significantly.

As fars as social security goes as a sole proprietor you are not only paying the 7.5% that a regular employee pays but also the 7.5% the the employer pays. So being self employed you are paying 15% off the bat for everything the company makes up to i think $150,000 (the social security tax has a cap but don't remember it off the top of my head).

Get a good accountant, there's all kinds of stuff you can write off and you'd be surprises that a simple change in your companies legal set up can and will affect your taxes.

JerrSun

 

basically 30% of your earning.. ya...

Form an S Corp and start paying yourself a paycheck that become deductible from your income and they you will need to pay federal and state employment taxes...

To get the taxes even lower, you will need more deductions.. but if you are making the big bucks.. taxes and everything else become relevant.

Good Luck and remember Scorps have until Feb 28 to file.

 

Get yourself a good tax person and sit down and go through all your filings...to me that doesn't sound like you have something filled out right...

 

"First go find yourself a good accountant. They will be able to help you get your taxes in order as well as recommend differnent set ups for you business which should reduce your tax liability significantly. "

I already have an accountant and she charged me $600 just for the tax return as well. That is how much money I owed after my business expenses and writeoffs. Now I need her to fill out my business tax form as well for even more money so that is what pissed me off and made me create this topic.

 

Get a better accountant and set up your own corporation. If you work things right you'll pay no taxes (or very little) and still be completely within the law.

 

You need a heck of a lot more write offs. That is the main benefit from being self employed. Yes, you have to pay the extra 7.5% of social security but being self employed you can write off: Cell phone, vehicle, insurance, internet access, etc.

 

Yeah I asked about my cell phone but the accountant said that I need to provide logs of the business calls I made. That is ironic since I only use my cell phone since I am 100% internet but when I do it is usually for business.

 

If your accountant is not recommending things to you to lower your tax burden, you need to get a new one.

First thing is to set up a corporation (S or C corp. I'm an S corp), then you have a lot more leeway in what's deductible and what's not. If your accountant isn't suggesting this to you, or telling you what things are good for writeoffs, your $600 is wasted. Tax paperwork is not difficult for them, they should be making good recommendations as well on how not to pay so much taxes.

 

Forget your accountant. Just have a paypal account that is only used for business. Get a paypal debit card. Pay you bills with it. It is a "company phone." Form an llc for extra protection. You can do it online for less than $100 and it is tax deductible as well. Need a new digital camera? Use the Paypal debit card. Need a new computer? Paypal debit. You get the idea.

 

I have been using my PayPal account and PayPal debit card for years However keeping track of the history, expenses, debits, etc. is not good when it comes to sorting it out for tax time. I noticed last Oct 2006 they have a new Monthly Overview which is nice but it doesn't display the names of the products so that is inaccurate.

 

Don't sort out paypal at tax time. Use and accounting software like QB, set up paypal just like any other bank account, keep track of transaction all year long. Then tax time is easy, send the QB file to the accountant. You bill will be a lot lower with a good accountant this way. 1-2 hours and they're done.

 

QB = Quickbooks correct? I purchased Quicken at first but uninstalled it and got a refund since it didn't display the information I wanted correctly. Right now I use OpenOffice and download the history as CSV files and open them up in a spreadsheet. So QuickBook offers something that Quicken does not? Don't I have to manually insert every transaction or is it done automatically if it were connected to a PayPal account? Thanks.

 

Oh, but we have more than that Besides social security/medical tax, state tax, and business tax we have to take care of sales tax (VAT, around 8-22% per each sale), insurance "tax", and so on.

Stay where you are - since it's cheaper there

Oh, and remember to report all your expenses - from every marker pen, phone calls and business lunches.

 

Best advice in this thread, period! If they are charging you $600 and shrug their shoulders when you hand them your cell phone bill that you use for business, find a new accountant!