Your Free Tax Prep Guide
Your company does not have to pay your whole tax bill all at once. Download your free tax prep guide.
Don’t get scared by a big tax bill or by the IRS deadline.
Taxes isn’t something to be afraid of,
if you’re moving smart.
You do not have to pay your whole tax bill all at ONCE, you can pay in installments. You can pay as low as $100 a month depending on your situation, You can also file what is called an extension, to buy yourself time on filing.
Yes, it may be very complicated and a lot of information to process.
So let’s begin first thing first let’s understand some quick terminology.
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Terminology
Tax Deduction (aka write-off) is any expense that is ordinary or necessary to operate your business/side gig. So, the following expenses need to be at least partially used for business to deduct them. If you are unsure, please contact your CPA or tax accountant.
Tax Credits are much like credits you get from a store. After you calculate your tax bill, you can use the credit to reduce the amount that you owe to Uncle Sam. Tax credits are more valuable than tax deductions because they directly cut the amount of tax you owe, rather than reducing the amount of taxed income. A $200 credit, for example, will turn a $1,000 tax bill into only $800. A few credits could even give you a refund you weren’t expecting.
Tax Exemptions is an amount the IRS lets you subtract from your income to reflect all the people who count on your income. You can claim as tax exemptions yourself, your spouse and your dependents. The IRS allows a set amount for each exemption and, as with deductions, this total is subtracted from your AGI to come up with your final, lower earnings amount upon which you must figure your tax bill. Your personal exemption amount is in addition to any tax deductions, either standard or itemized, that you claim
Taxable Income is your overall, or gross, income reduced by all allowable adjustments, deductions and exemptions. It is the final amount of income you use to calculate how much you owe in taxes.
1099 is a form used to report non-employment income, including dividends paid from owning a stock or income that you earned as an independent contractor.
Adjusted gross income, or AGI, is all the income you receive over the course of the year, including wages, interest, dividends and capital gains, minus things such as contributions to a qualified IRA, some business expenses, moving costs and alimony payments. AGI is the first step in calculating your final federal income tax bill.
Filing Status is an IRS classification based generally on your marital status. It is used for your filing requirements, standard deduction, ability to claim certain tax breaks and the amount of your tax.
There are five filing statuses:
> Single
> Head of Household
> Married filing separately
> Married filing jointly
> Qualifying Widower
Sole Proprietor is someone who owns a business by themselves. They report their share of income and expenses on Form 1040, Schedule C.
Long Story Short
Okay now that we have terminology out the way I need you to understand one MAJOR thing Not paying taxes is a crime and yes Taxes is a HUGE expense for entrepreneurs. In this ebook you will understand Taxes, how you are taxed and how to lower your tax bill every year.