Question by big_j_gizzy: If you have an online business offering a service to others…?
I am regsitering my business for taxes. Which one would I be expected to owe if any, for just selling a service online?
Sales Tax
Use Tax
Income Tax Withholding
Single Business Tax
or none of the above. Thanks.
Best answer:
Answer by mathew
Assuming that you will still be filing a individual income tax return the profit or loss from your business activity will be calculated on a Schedule C. That amount will be reported on Line 12 of your Form1040. Within the Schedule C there may be some taxes that you will have paid and they will be used to offset your income. If your profit exceeds $ 400 you will be subject to Self Employment tax which is 15.3% of your net profit however your will be allowed to adjust your total income by one half of the SE tax on line 27 of the Form 1040. If you believe that you will have a sizable profit from this venture you should make estimated tax payment each quarter. Those estimates are on the anticipated income tax liability at the end of the year. As this will be a new business you may need to make adjustments in those estimates each quarter. If you have never had a business before you should consult a tax professional before you start and they can review all of this stuff in greater detail.
What do you think? Answer below!