Question by bullfrog916: how would a small business affect my taxes?
i was thinking about starting a small pressure washing business on the side. still keeping my regular 9to5. how would this affect me? come tax time. i would do this to make extra money, but is it even worth it?
Best answer:
Answer by Bash Limpbutt’s Oozing Cyst©
If you turn a profit, it’s worth it, at least from the tax perspective.
You’d report the income and business expenses on Schedule C. If the net income for the year was more than $ 400, you’d attach Schedule SE to figure the self-employment tax. The self-employment tax covers your Social Security and Medicare taxes. You pay both the employer and employee portions. The rate works out to roughly 14.16% due to the way that it’s calculated.
The income is also added to your other income for figuring the income tax due. If you were in a 15% bracket, the total tax bite would be between 30% and 40% for Federal taxes, plus whatever your state collects.
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