Paying selfemployed income taxes is awful.
It can be extremely difficult to figure out exactly
what you need to pay, and nobody is sharing
what they have personally paid in the past.
How can you plan accurately when number one, it is
so confusing to calculate how much you should set aside.
And number two, business owners will not share any
personal information about what they paid in taxes.
For some reason, tax and financial information
when it comes to business and selfemployment
seems to be completely off limits.
No one wants to talk about it.
Well, Luckily, I am an open book and
I think it's extremely important that business owners
know what to expect and can see real
life examples of what other entrepreneurs, self employed
individuals are paying in their income taxes.
How can you plan know what to expect?
My concern is and I've got
to check it with my accountant.
But this might bump me up into a higher tax
and feel confident in what you set aside for taxes
if no one is sharing their actual numbers.
Now it's important to me as an entrepreneur and as
a coach that I be a resource for you guys.
That is pretty much an open book
that shares the information that other places,
people and businesses are not comfortable sharing.
I'm going to tell you that now I'm going to be
showing you a look at my own personal tax returns.
You're going to see three different points of
my business's development and what I had to
pay in self employed income taxes.
First, I'm going to show you a look
at my business when it was new in
development and I was not earning very much.
Next, I'm going to show you a look at
my business once I reached a six figure income.
And lastly, I'm going to show you a look at
the most recent tax return that we just filed for.
Tax year 2021 when I was earning multiple six figures.
The first year of taxes I'm going to show
you is from tax year 2011 quite a while
back, and this was a product based business.
My total gross sales amounted to $53,033.
But after subtracting the cost of the goods that
I was selling, the total gross income was $34,316.
After deducting all of my business operating expenses,
I had a net profit of just $13,417.
Now there was W two income also on this tax return.
So you'll notice that there was federal income tax
withheld up at the top portion in Red.
You'll see the total tax that I paid
for my business and my self employed taxes,
which in total amounted to $1,895.
And for California state taxes, I had to pay $1,166.
Now the next year I want to show you is tax year 2017.
In 2017, my photography business grossed $163,599.
After deducting expenses, the total net
income from the business was $89,041.
Now, there was some W two income on this tax return.
So you will see that federal taxes were
withheld due to that W two job.
You'll also notice that I had paid 2017
estimated tax payments which basically means that you
pay your tax bill in advance.
I paid in advance $11,300 in addition to what
I had already paid in those estimated taxes, I
also owed a balance of $7,341 in additional taxes.
This means that from my business, the
total amount of taxes owed for that
year was $18,641 for California state taxes.
I had paid estimated taxes in the amount of
$1,830 and I had a remaining balance of $742
which means my California total tax was $2,572.
Now, the last year that I want to share for
income taxes Was this most recent tax year of 2021.
I'm not going to show you what my gross
income was Because I'm going to save that for
another video but I will show you what my
net income was which means the take home pay.
After all of my expenses and deductions
in 2021, I had a net income
of $352,875 for California state income taxes.
I owed $15,984.
Unfortunately, I did slightly underpay my estimated income
taxes and so I did have an underpayment
penalty in the amount of $282 which brought
the total amount due to $16,266.
Now, in 2021, I was the sole income earner for
our family of four so I did not have any
W two income on this tax return from my husband.
Now, in 2021 estimated income taxes, I estimated and paid
in $85,000 for my estimated tax payments in advance.
My total tax amount for my business
for 2021 Ended up being $81,178.
So I did receive a refund back of what I had overpaid
in estimated taxes and while that was a look at my own
unique numbers, Everybody is going to have a different amount that they
need to plan to set aside for tax time.
It's incredibly important that you understand exactly
how much you should be setting aside
for your own unique business.
Next, I want you to click the link in
the video description down below and watch the video
where I show you exactly how to calculate that.
Number one, I'm going to show you a peak when my
business like a cross between a business and a brisket.
If you have a barbecue business restaurant, I guess.
Is it a briskness?
Do you sell brisket, sleeves?
Sleeves?
They're like bat wings.