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Daycare and Taxes>Maryland taxes on $50,000 net profit
permanentvacation 11:57 AM 10-08-2015
Does anyone know how much I would owe in taxes in Maryland if I claimed that I made $50,000 after I write everything off? And would I need to pay taxes throughout the year or just after I filed my taxes at the end of the year?
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Thriftylady 12:03 PM 10-08-2015
YOu will have to file Maryland taxes to find out. I guess my question is how is it you say you are always broke then? We have been living on $30,000.
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Blackcat31 12:08 PM 10-08-2015
Originally Posted by Thriftylady:
YOu will have to file Maryland taxes to find out. I guess my question is how is it you say you are always broke then? We have been living on $30,000.
I would assume cost of living in each area makes a huge difference.

What I pay pennies for costs several dollars in other states.

$50,000 doesn't seem like a lot for OP's part of the country at all.

Also, every one of us has different financial obligations.

OP may have lots of credit card debt or other debts she is paying down where as I have no credit card debt and don't even have a mortgage or rent payment to make so again what each of us earns financially has nothing to do with whether we are broke or not. kwim?
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permanentvacation 12:17 PM 10-08-2015
Actually, if someone on this forum lives in Maryland and has made around $50,000 profit in daycare, they would know the answer to my questions. So I could find out how much taxes I would owe and whether I would have to pay them throughout the year or only after I filed my taxes by that person or those people who have already claimed $50,000 letting me know how that amount of income would effect taxes.

I have not been making any where near that amount. But I am hoping to work towards buying a house in a couple of years and mortgage lenders have told me that I need to make $40,000 per year to get a $120,000 house. So I raised the idea of income to $50,000 in order to qualify for a higher priced house since there are not many houses for $120,000 in the area that I would like to buy a house in.

I am asking not because this is my current situation. But because it is what I would like to work towards obtaining and would like to know how making that amount of income would effect me in each area. I like to look at the big picture and know what to expect before I do something.
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permanentvacation 12:33 PM 10-08-2015
I have been living off of $7,000 to $10,000 per year for many years now. Which is why I have been so broke. But now that things are changing with my daughter planning to move out and my ex planning to stop paying child support, I am able to work towards things that I want rather than doing things that benefit my daughter and my ex.

So, I am looking into making a few changes which would put me in a financial bracket that I haven't been in since I was married about 10 years ago. Back then, I used to make $1,200 per week in daycare which is a little over $62,000 per year. But since we split up, I have made considerably less. I've been making much less partly because of my kids and partly because of my ex controlling me in many ways. Here soon, my younger daughter will be 18 years old and plans to move out as soon as she turns 18. If she doesn't, she will definitely move out by next August when she starts college. When she moves out, my ex will not have a pawn to use to control me and she won't be calling me at work to tell me to leave work to tend to her which leads to problems at work out of the house or me paying a substitute in daycare. So, after she moves out sometime between February and August, I will be able to live my life however I chose. So I am looking into ways to increase my income in daycare and by going out to work. I would love to be able to own my own home again and have talked to some mortgage lenders to learn what I have to do financially to be able to buy a house in a couple of years. It will take a lot of work on my part to raise my income and keep it at the required rate of at least $40,000 (4X the amount I'm used to making!), and keeping it at that rate for 2 years! And finish paying off a good bit of my debt. But if I can do this, I should be able to buy my own house, hopefully, in 2 years.

But since I haven't had that high of income for many years, I would like to get an idea of what to expect regarding taxes. I need to also factor how much to set aside to pay taxes and when to pay taxes (quarterly or yearly) into my financial plan.
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daycare 12:37 PM 10-08-2015
Originally Posted by Thriftylady:
YOu will have to file Maryland taxes to find out. I guess my question is how is it you say you are always broke then? We have been living on $30,000.
In CA where I live you couldn't even pay a year of rent with $50k....
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permanentvacation 01:03 PM 10-08-2015
Thriftylady,

I guess I should have explained things rather than simply ask about how that income would effect taxes. I haven't been making that amount, I'm hoping to make changes that would (hopefully) increase my income to that amount and wanted to know how it would effect my taxes.

I have truly been completely broke for many years. I have honestly appreciated everyone's suggestions on helping me with my finances when I've asked for ideas on how to handle my finances on this forum. But soon, after my daughter moves out, I will truly be free to handle my finances and every aspect of my life on my own however I want/can/need for myself. So I am hoping to make changes that will better my life emotionally, medically, physically, spiritually, and financially. For many, many years, I have allowed my ex to control practically every aspect of my life and have lived for my children; to fulfill their needs and wants. But, after my daughter moves out, I will be truly able to focus all on MYSELF for the first time in about 20 years!

I am trying to figure out what I want to do with my life; continue college, do daycare 24/7, do daycare during the day and get an evening and weekend job added to daycare, (if I increase my daycare enough, I could make enough to buy a house with my daycare income), or get a management position out of the house that will pay enough to buy a house with, etc. I will have so many options opened to me once my daughter moves out. My mind is racing with different scenarios and I'm trying to see the big picture of each scenario in hopes of making the right decision that will lead me on the right path to purchasing my own home in 2 years.

I have never bought my own home.. by myself! I'm scared to death and am driving myself crazy trying to get all the information I can in hopes of doing everything right to be able to buy a house on my own!

I kind of went rambling on here. Sorry!

But, yes, I can see how my initial post made you wonder why I say I'm so broke. I really should have explained things rather than just throw that question out there. I'm sorry that I made you wonder what was going on.
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permanentvacation 01:43 PM 10-08-2015
Okay, someone on the taxes thread on this forum said to look online for an estimated tax website. I found one. It said that I would need to pay about $860 quarterly.
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MyAngels 03:22 PM 10-08-2015
You might want to recheck your estimation. Self employment taxes alone are 15.3%, which amounts to $7,650 per year on a $50,000 net profit. You do get to deduct half of that amount on form 1040. Your personal income tax amount depends on a lot of things, so that's something only you or your tax preparer can answer.

On another note: I hate taxes
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Thriftylady 03:32 PM 10-08-2015
I am sorry if I was harsh. I myself am just tired of being so poor. Between making sure DD has all she needs (not wants mind you) and keeping DH in groceries on the road, I don't get to eat some days. I am so tired of it. I am trying so hard to make daycare work, because there are only min. wage jobs around here, and I make more than that on daycare. I would kill for a few thousand more a year. And I always owe taxes because our how our local towns do it. You pay taxes where you work, again where you live, etc.
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TomCopeland 09:42 AM 10-09-2015
Originally Posted by permanentvacation:
Does anyone know how much I would owe in taxes in Maryland if I claimed that I made $50,000 after I write everything off? And would I need to pay taxes throughout the year or just after I filed my taxes at the end of the year?
As long as you made a profit of at least $400 a year, you will always owe Social Security/Medicare taxes of about 15%. Because you are single, you must therefore pay in quarterly estimated taxes using IRS Form 1040ES. You may or may not owe federal and Maryland income depending depending on your personal circumstances (exemptions, standard deduction, medical expenses, tax credits, etc.). Therefore it's very difficult to estimate your taxes on $50,000. You might want to look at last year's tax return, change the profit on Schedule C to $50,000 and see how that would affect your taxes.
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permanentvacation 11:01 AM 10-09-2015
That's a good idea; just change the numbers on last years taxes to see what it would have been.

Thanks, Tom.

I left a message for my accountant to call me so I can ask him about this.
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