Daycare.com Forum
Daycare and Taxes>First Time Tax Filer as Self-Employed- So lost!
Unregistered 06:31 PM 11-12-2011
After reading through a majority of these treads about taxes.......I think I've made a big mistake.
I started babysitting 4 children starting in January. In May, I received a lot more interest in my "babysitting" and I'm now a Group Home Daycare with 12 children enrolled.
I applied and received an EIN during the summer, I've copied and documented all income, expenses and miles, I use MMK and will provide my families with the proper documentations.......and I am confident I've covered all bases regarding my home daycare.
My big mistake......taxes. I saw someone mention paying quarterly taxes and this was the first time I've heard of this. I read through Tom Compland's blog and the more I read about quarterly taxes, the more I think I was suppose to be paying quarterly. I haven't been paying any taxes at all.......I assumed I would just do it all at the end of the year like I used to do when I was employed at a daycare center. But now that I'm self-employed - I realize I'm in charge of paying taxes for myself and I've saved a nice amount of money for this purpose.
My question(s):
1) Am I suppose to be paying taxes quarterly or will I be okay with paying taxes anually? Year-to-date, I've made around $15,000.
2) Will I be penalized and owe if I was indeed supposed to be paying quarterly?
3) What are the first steps I should be doing if I am required to pay quarterly? Are there special forms I need to complete and where/who do I send in my taxes to?
I'm so lost.....any help is super, super appreciated!!
I started babysitting 4 children starting in January. In May, I received a lot more interest in my "babysitting" and I'm now a Group Home Daycare with 12 children enrolled.
I applied and received an EIN during the summer, I've copied and documented all income, expenses and miles, I use MMK and will provide my families with the proper documentations.......and I am confident I've covered all bases regarding my home daycare.
My big mistake......taxes. I saw someone mention paying quarterly taxes and this was the first time I've heard of this. I read through Tom Compland's blog and the more I read about quarterly taxes, the more I think I was suppose to be paying quarterly. I haven't been paying any taxes at all.......I assumed I would just do it all at the end of the year like I used to do when I was employed at a daycare center. But now that I'm self-employed - I realize I'm in charge of paying taxes for myself and I've saved a nice amount of money for this purpose.
My question(s):
1) Am I suppose to be paying taxes quarterly or will I be okay with paying taxes anually? Year-to-date, I've made around $15,000.
2) Will I be penalized and owe if I was indeed supposed to be paying quarterly?
3) What are the first steps I should be doing if I am required to pay quarterly? Are there special forms I need to complete and where/who do I send in my taxes to?
I'm so lost.....any help is super, super appreciated!!
Michael 11:45 PM 11-12-2011
We will be having a Tax time webinar with Tom Copeland soon. Last year we had over 60 members participate.
Nellie 07:05 AM 11-13-2011
I think that if you have employees that is when you have do the quarterly taxes. My dad, my husband, and my self are all self employed and we all only pay when we do our income tax. When my dad had employees he had to do the quarterly taxes.
Sunchimes 08:51 AM 11-13-2011
You have to pay quarterly, employees or not. I've been self employed for over 30 years (not in child care), and I only had an employee the last 4 years, when my husband retired and went to work for me. I've always had to pay quarterly if I was showing a profit.
There may be some loophole if this is your first year or something, I don't know, but seek a tax professional. You might want to consult one now. The next payment is due January 15, so you can still send in some that would lower penalties if you have any.
There may be some loophole if this is your first year or something, I don't know, but seek a tax professional. You might want to consult one now. The next payment is due January 15, so you can still send in some that would lower penalties if you have any.
kendallina 10:26 AM 11-13-2011
Yes, you should have been paying quarterly taxes being self-employed. Whether you have employees or not doesn't matter.
I'm not sure what happens when you should have been paying quarterly and you haven't been, there may be some penalties involved. I would consult a tax preparer or the IRS yourself and ask what you should do now.
If you are married and your spouse has had enough withholdings to cover what you would owe, then you do not have to pay quarterly taxes. This is what I do. My husband has a little extra withheld from his salary, so that at the end of the year that 'refund' money that we would be getting, is much much smaller because I need to 'pay' taxes on my income. Hopefully that makes sense...
I'm not sure what happens when you should have been paying quarterly and you haven't been, there may be some penalties involved. I would consult a tax preparer or the IRS yourself and ask what you should do now.
If you are married and your spouse has had enough withholdings to cover what you would owe, then you do not have to pay quarterly taxes. This is what I do. My husband has a little extra withheld from his salary, so that at the end of the year that 'refund' money that we would be getting, is much much smaller because I need to 'pay' taxes on my income. Hopefully that makes sense...
Nellie 08:09 AM 11-14-2011
I'd go to an accountant. I looked it up and and it said every self employed person needs to file a tax return and make estimated payments. My husband in some years has worked a normal job too and he had extra taken out, but according to what I read that in some cases EVEN if you are getting a return that you may be penalized for underpayment, not making payments in a timely matter, ect. We could have been penilized for that. We have never made estimated payments and have never been penalized, and I don't know why. I don't make much and with the way my husbands work is he doesn't make a profit until the last quarter and we are doing are tax return as soon as we can, but this is what the IRS says about the last payment due on Jan 17th You do not have to make this payment if you file your 2011 tax return by January 31, 2012, and pay the entire balance due with your return.
. But I know that we haven't paid our taxes that early. I don't know why we have never been penalized. Time for me to go to an accountant.
Here is the Website for the Estimated Tax for Individuals http://www.irs.gov/pub/irs-pdf/f1040es.pd
. But I know that we haven't paid our taxes that early. I don't know why we have never been penalized. Time for me to go to an accountant.
Here is the Website for the Estimated Tax for Individuals http://www.irs.gov/pub/irs-pdf/f1040es.pd
dave4him 06:01 PM 11-16-2011
Originally Posted by Michael:
We will be having a Tax time webinar with Tom Copeland soon. Last year we had over 60 members participate.
We will be having a Tax time webinar with Tom Copeland soon. Last year we had over 60 members participate.
Im going to want to know when!
TomCopeland 08:21 AM 03-20-2013
Originally Posted by dave4him:
Im going to want to know when!
We had our tax webinar on February 12th. Watch for it next year.Im going to want to know when!
tamarab71 06:22 AM 03-20-2013
I just had my first daycare child enroll 2 months ago-He only comes 3 hours/day and I only get paid $105/week from his parents. He is an infant so there is no CACFP program for him as I only give him one bottle/day (not worth the paperwork involved). My husband works and has extra taken out for taxes but we depend on that as a refund come tax time, I don't want to lessen that for him by not paying taxes myself. Now, as it's almost April, I'm wondering how to go about paying self-employment taxes. Does anyone have any suggestions? Help!
TomCopeland 08:20 AM 03-20-2013
Originally Posted by tamarab71:
I just had my first daycare child enroll 2 months ago-He only comes 3 hours/day and I only get paid $105/week from his parents. He is an infant so there is no CACFP program for him as I only give him one bottle/day (not worth the paperwork involved). My husband works and has extra taken out for taxes but we depend on that as a refund come tax time, I don't want to lessen that for him by not paying taxes myself. Now, as it's almost April, I'm wondering how to go about paying self-employment taxes. Does anyone have any suggestions? Help!
It's too late in this quarter to have your husband withhold more from his taxes. So, you can file quarterly estimated taxes for your income by April 15th. File IRS Form 1040ES. It's basically a deposit slip indicating how much you are sending the IRS. You will owe about 20% of your gross income (parent fees and CACFP income).I just had my first daycare child enroll 2 months ago-He only comes 3 hours/day and I only get paid $105/week from his parents. He is an infant so there is no CACFP program for him as I only give him one bottle/day (not worth the paperwork involved). My husband works and has extra taken out for taxes but we depend on that as a refund come tax time, I don't want to lessen that for him by not paying taxes myself. Now, as it's almost April, I'm wondering how to go about paying self-employment taxes. Does anyone have any suggestions? Help!