Job and Business

Today TaxMama hears from Jessica in Texas with a sensible question. “I have a full-time job that collects taxes, etc. I am considering starting a small business on the side. If I do, will I need to file separately from the full-time gig taxes on a quarterly basis? I can’t seem to find a good guide/site for those who are trying to do a business while still employed.”

TaxMama answers a question on Tax

Dear Jessica,

Practically every site and book and IRS publication that deals with small businesses, also applies to those who have jobs as well.

The fundamental advantage that you have when you are also employed is that you can adjust the withholding on your paycheck to cover the taxes you will owe on your business profits.

That way, you can avoid the burden of paying quarterly estimated taxes. In fact, depending on your business profits, you can even wait until September or October to withhold the extra taxes without facing any penalties for late payment.

You’re asking a sensible question. And I’ll bet you have dozens more. This is when you want to schedule some time with a good tax professional and start doing some planning to ensure your business is successful – and stays that way.

My book, Small Business Taxes Made Easy will give you a good foundation and help give you a list of things to discuss with your tax professional. http://www.taxmama.com/AskTaxMama/book/ It will also help you develop a business plan and give you a checklist to use when you start a business

Other useful resources include
William Perez, EA’s About.com tax site http://taxes.about.com/
Jan Zobel, EA’s site and her book – http://www.janztax.com/
Frederick W. Daily’s site and books – http://www.taxattorneydaily.com/

And remember, you can find answers to all kinds of questions about small businesses and other tax issues, free. Where? Where else? At TaxMama.com.

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