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Visitor I

Estimated Taxes for Sole Proprietorship?

I know there are two ways to go about estimated tax payments for a sole proprietorship. The quarterly estimated payments through the EFTPS and through federal withholding if employed and running a sole proprietorship. I live and work in the state of Pennsylvania, and I will be doing the tax payments through my employer with the tax withholding.

How much should I withhold for federal taxes per $1,000 yearly income paid weekly?

How much should I withhold for state taxes per $1,000 yearly income paid weekly?

This is a hobby-related online business that allows me to enjoy the expensive aspect of my hobby. So I will be working full time and running the business during evenings and weekends.
1 Comment
Catalyst V

Estimated Taxes for Sole Proprietorship?

You will only owe tax on the profit you make on your business , not the sales amount. You have to treat it like a business and not a hobby for this to 'fly' with the IRS. You need to depreciate equipment used according to how much use is personal and how much is how much business use. You can only deduct the supplies used in the sold product. Other amounts are inventory assets or personal supplies.

 Any profit will be subject to FICA, ie social security and medicare, at 15.4% and your  income federal and state will be taxed at your marginal rate when combined with your full time job income