BrightBeginnings 12:40 PM 04-14-2011
Hello,
I have been doing daycare for the last few years and did my own taxes for 2008 and 2009. Everything went very smoothly and I have been doing them on my own again for this year. Mid-2009 the daycare business started doing really well and my husband stopped working retail and joined me at home doing daycare. We've been working that way ever since. For 2010, daycare was our only source of income. We made approximately $49,500 and even with putting in all of my deductions it is showing that we owe over $9000 in taxes.
We do NOT have kids, so we aren't getting any child credits or anything like that. Should I have expected the number to be this big? We expected to have to pay in a little bit but definitely did not expect it to be that much! In the past we have always received a refund, but with neither of us having an outside job we realized we were going to have to pay in. We just didn't expect it to be nearly $10,000! Is this normal or is something going wrong?
daycare 01:56 PM 04-14-2011
Originally Posted by BrightBeginnings:
Hello,
I have been doing daycare for the last few years and did my own taxes for 2008 and 2009. Everything went very smoothly and I have been doing them on my own again for this year. Mid-2009 the daycare business started doing really well and my husband stopped working retail and joined me at home doing daycare. We've been working that way ever since. For 2010, daycare was our only source of income. We made approximately $49,500 and even with putting in all of my deductions it is showing that we owe over $9000 in taxes.
We do NOT have kids, so we aren't getting any child credits or anything like that. Should I have expected the number to be this big? We expected to have to pay in a little bit but definitely did not expect it to be that much! In the past we have always received a refund, but with neither of us having an outside job we realized we were going to have to pay in. We just didn't expect it to be nearly $10,000! Is this normal or is something going wrong?
really hard to say.... everyone has different expenses and what not..
I went to h&R block on monday, they said I owed over $4000.00 in taxes.... Plus wanted $800 to file them.
I left and took them to the lady that did my taxes last year and I am getting an $800.00 refund and only have to pay her $300.00.
So my point is make sure that you are writing off everything that you can. Are you claiming everything that you are entitled to?
TomCopeland 06:15 PM 04-14-2011
Paying $9,000 on $49,500 of profit is about 18% in taxes. That is reasonable considering you pay a net of about 14% Social Security taxes. If $49,500 represents your gross income then your taxes are too high. The main reason why some providers are surprised at their taxes is because of Social Security taxes. Self-employed people pay about 14% of their profit in Social Security taxes. Add on to that federal and state income taxes and it can add up.
BrightBeginnings 05:06 AM 04-15-2011
$49,500 is our gross income before any deductions. After putting in all of our deductions, it is showing over $9000 in taxes. We are using Turbo Tax Home & Business. Should we just use the forms and the Tax Workbook & Organizer and not use tax prep software?
TomCopeland 01:02 PM 04-15-2011
I don't know what your deductions are or whether you claimed all that you were entitled to. The big deductions are on Form 8829 (property tax, mortgage interest, rent, utilities, house insurance, house repairs, and house depreciation). The big deductions on Schedule C are usually food, supplies and mileage.
I would advise you to use the Tax Workbook to fill out your tax forms by hand. Then compare that with what the tax software does to see if you can see any differences.