I don't want to wait until the end of the year to figure out how much in taxes I will owe for revenue earned. How do I estimate the amount of taxes per transaction to set aside so that I will have enough money saved to cover taxes at the end of the year.
Also not a tax expert, but here are the 2015 tax brackets: http://www.forbes.com/sites/kellyphil...
This will be based on your total income for the year, so if you're working other jobs that already have taxes withheld, you can deduct that from your total due taxes... I'd recommend setting your exemptions to 0 for any jobs that are already withholding taxes - this will tax you at the highest possible rate for your income from that job and will mean you'll owe the least amount possible at tax time. And as Rosie said, keep track of business expenses. If you're licensed and insured and operate out of your home, this can include anything from cleaning supplies to dog food to replacing carpeting or wood floors. If you're planning on this being a full time endeavor, consult an accountant so you know what you should be keeping track of.
Hi Lisa,
I am not a tax expert so please note my response is simply on my own experience. I would hold aside 15% of the revenue earned. I opened a savings account specifically for this. With that said, I treat this as owning my own business. Therefore, if you use an accountant please be sure to track your "business expenses". I offer pick up and drop off service for some of my clients. Mileage would be a business expense. I bought a carpet cleaner and vacuum.. Business expense. These are all deductions you as a business owner are allowed. Once it is all said and done, you might not owe as much as you anticipated.. Nonetheless, if you have it in a interest earning savings, it's a win win..
Thanks Rosie