I am starting a private musical studio…questions about Self-Employment tax?

By using the copies of ALL of your receipts that you made out and gave to your clients when they paid you and your business bank account deposit slips would be a very excellent written record that you need for this purpose should the IRS choose that they would want to verify your in rank that you entered on your 1040 income tax return that you correctly completed and made a copy of the tax return for your records and signed the other copy to send to the right IRS address for processing during the 2012 tax filing season.
Very excellent daily detailed written records and receipts of all of the ordinary and necessary expense of this business operation is one of the NEEDED supplies for any one that is involved in any type of self employed self-determining contractor business operation.
You would be a self employed self-determining contractor with your own business operation and your ORDINARY and NECESSARY business expenses that you NEED to have very excellent detailed daily written records of them for this purpose and they will HAVE to be reported on each separate LINE of the schedule C of the 1040 tax form for this purpose.
And here you go using the below in rank should help you get started for your first year as a self employed self-determining contractor and as you progress and your business starts to grow you may even need some excellent professional help with it for your future.
Schedule C and the SE of the 1040 federal income tax return read each line when you start at the top of the page on the schedule C for your self employed self-determining contractor business operation your name is fine your social security number is fine and your present home address can all be used for this purpose just do NOT try to make it complicated and read each line and word and know what it says and do what it says and then you should NOT have any problem.
You can also find the line by line directions for the schedule C by using the www.irs.gov website and using the search box for the schedule C 2010 Directions for Schedule C (2010) 2010 Table of Contents Profit or Loss from Business

http://www.irs.gov/directions/i1040sc/…

Specific Directions

http://www.irs.gov/directions/i1040sc/…

BUT GOOD detailed records are really necessary for your business operation to succeed.
For your 1040 Federal income tax reporting you would use the below enclosed in rank for this purpose.
Use the search box at www.irs.gov for Publications and Forms for the Self-Employed

http://www.irs.gov/businesses/small/arti…

All of your yucky income from all sources of worldwide income will be reported on your correctly completed 1040 federal income tax return.
Using a receipt book to make a receipt for each time that any one pays you in any way or item or trade for the amount of $ $ value that is received at that time and totaling the yucky self employed income for the tax year with any other 1099-MISC income that is received after the end of the tax year and entering the total yucky $ $ $ value amount on the schedule C line 1 GROSS receipts from your trade or business
In general, taxpayers may deduct the ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is apt for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.
You would have to be sure that you handle your business deductions correctly for your business operation.
For directions and forms go to the IRS.gov website and use the search box for periodical 334 a very excellent place to start with examples.
Periodical 463 Travel, Entertainment, Gift, and Car Expenses
Use the search box at the www.irs.gov website for Small Business and Self-Employed Tax Center
Filing Season Central is your one stop help center for filing your business returns. This includes Highlights of Tax Law Changes, Tax Tips, and more.
Go to the IRS gov website and use the search box for the below referenced material
*Periodical 4591, Small Business Federal Tax Responsibilities (PDF 470.1K)

http://www.irs.gov/

http://access.wa.gov/business/taxes.aspx

Hope that you find the above enclosed in rank useful for your situation and excellent luck to you.

First, the thought of paying taxes and getting them back makes no financial sense.
If no tax is owed, do not pay any. You need to keep track of your business income and your business expenses and the difference between your business income and your business expenses is the taxable amount you will pay income tax and social security ( aka self employment tax)
Second, the business expenses in 2011 are not written off in 2011 and they will be in 2012 and 2013.
Third, go on line at irs.gov and read the periodical ” starting a business) and educate yourself as to what the supplies are when someone starts a business. Yes, you can hire a professional too but equally vital is the fact you need to know the supplies to be met for tax purpose.

If you’re well organized, that’s excellent.

It’s a very terrible thought to try to stay on top of tax compliance by yourself. An accounting certificate or business industrialist certificate still won’t cut it.

It doesn’t matter how much you know about taxes at any given time. Prime Example: The recent two-month payroll tax cut extension by the dunderhead ignorant idiots in Congress. A person could have graduated number 1 from Wharton School of Business and they wouldn’t have a chance of keeping up with the new laws constantly coming down the pike from the dunderhead ignorant idiots in Congress. Tax law changes every day.

Find a tax advisor now. Obviously you do the tax return after the first of the year, but most times treatment of an item is customary at the time of the transaction. For example, are your expenditures for books and piano tuning lost in 2011 or deductible for 2012?

The answer is “it depends.” You’ll be dealing not only with self-employment tax, you’ll be dealing with paying back of start-up costs, decrease, establishment of profit motive, inventory issues, and that’s just a start of what you’d have to learn and keep up with on a daily basis to do your own tax compliance.

Don’t be fooled into a fake sense of security thinking that buying some off-the-shelf computer software will magically turn you into a tax compliance expert. It won’t.

Call around to some tax offices to get a sense of who has experience with small businesses and who you’re comfortable dealing with. CPAs are fine, but keep in mind they tend to be much more expensive than other options, and many (most) CPAs are not tax specialists (their tax knowledge was on the road to obsolescence the moment they graduated from college if they didn’t immediately start specializing in taxes, which most don’t). An Enrolled Agent is generally a excellent choice. They’re specifically federal income tax specialists, and they’re usually much lower in price.

Tax plotting (translate: not flushing a bunch of your money down the drain) is an ongoing process, not just how the return is preparered. Get professional help up front. You wouldn’t perform your own building electrical repairs unless you were an veteran electrician. You wouldn’t fix the brakes on your car unless you were an veteran auto mechanic. You wouldn’t take out your own appendix unless you were an veteran surgeon, and maybe not even then. Don’t try to take care of tax compliance by yourself. You’ll be kicking yourself later.

you will report all this income and your business expenses on Sch C
if the ‘net’ amount is $ 400 or more, also a Sch SE where you calculate your self employment tax
(and until Congress settles the dispute about the SS, we won’t know which it will be, approx. 13.3% or 15.3%)
when you have determined your net for the first quarter, you will prepay what you anticipate you owe on 1040ES in April, then the subsequent ones in June, Sept and next Jan
altho you don’t want links, these forms can be found at www.irs.gov and publications are listed there you can order to help you know what you need to do