Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
These payments should be reported on a Schedule C on their own. Your expenses for the same will be also shown on the Schedule C.
The other business you have should not (unless the same type of work) be merged.
What is a schedule C exatly?
If your LLC is a single member then you are most likely showing that on Schedule C (sole proprietor) too.
The Schedule C is used for self employed and Single Member LLC.
the LLC has requested to be taxed as S corp
and if I wanted to do a diverse set of business practices under one LLC, is there a way to do that?
no, it's a single member. Pretty new though
Then you would simply have 2 Schedule Cs with your 1040 filing
ok, so they'd really be taxed about the same then
If these are not the same type of working businesses then separte is best
to the last statement
and since my taxes aren't being taken out ahead of time, is there a way to figure out how much I should be setting aside?
You will be including your Gross income (net minus expenses) as regular income and the amount over (of Gross) $400 as Self Employment tax.
You would want to calculate the Gross
The SE tax is your SS and Medicare
self-employed person pays 15.3% total.
ok and expenses could include, say the gas it requires to go back and forth to the office?
Gas (actual car expenses) or the mileage. Actual would include gas, depreciation, repairs....
The mileage uses a set amount and is easier and takes into the calculation depreciation on a national level
ha ok, so theres a lot of room for what's considered an expense
It must be ordinary and needed to the business
ok so they would then calculate that for me?
They being theres a box on the sched C?
Oh, the mileage is a set amount per mile for business, yes the Schedule C has a place for that as well.
If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer toPublication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates.
This list is not all inclusive of the types of business expenses that you can deduct. For additional information, refer to Publication 535, Business Expenses.
The employees listed above are not other independent contractors that you may need to pay. You would list those on the Schedule C too but not as employees.
If you have an expense that is directly to the work then it is most likely allowed.
It just needs to be substantiated with receipt or other paperwork.
ok, so if I was running my eccommerce business from a home officein my house which I rent, I heard I would calculate the percentage of the office within the hous and deduct that percentage from my rent. Is that true?
Yes, that is correct. Publication 587 has detailed information on rules for the business use of your home, including how to determine if your home office qualifies as your principal place of business.
ok great, and one last question, is the sched C within the 1040 EZ?
You will need to use the 1040
ok the regular 1040
Would you like a link
You can look at that to get a feel for what you will be using
well thank you so much for your help
You are most welcome. Your positive rating is always thanks enough.
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