Self-employment

[lawkev]

What is the name of your state? New York

I need infomation on paying taxes as a self-employed individual. Currently, I am an employee but I would like to return to my old job as a taxi driver. I would be self-employed and I need to know how to figure my adjusted gross income. Basically, as a taxi driver I will only have gas and lease expenses. The rest of the income is my profit. I was told to use form 1040 es to determine if I have to make estimated payments. I would like to make quarterly or even monthly payments even if I'm not required to do so. When determining how much I will make in 08 would I include my expeses in my adjusted gross income? How do I use form 1040 es? I have been an employee so far this year. How would that work out at tax time?

Thank you

 

[LdiJ]

What is the name of your state? New York

I need infomation on paying taxes as a self-employed individual. Currently, I am an employee but I would like to return to my old job as a taxi driver. I would be self-employed and I need to know how to figure my adjusted gross income. Basically, as a taxi driver I will only have gas and lease expenses. The rest of the income is my profit. I was told to use form 1040 es to determine if I have to make estimated payments. I would like to make quarterly or even monthly payments even if I'm not required to do so. When determining how much I will make in 08 would I include my expeses in my adjusted gross income? How do I use form 1040 es? I have been an employee so far this year. How would that work out at tax time?

Thank you

If you are going to do it that way, then you need a really good bookkeeping system that tracks your expenses on a weekly basis. You need to be disciplined enough to do your bookwork weekly.

Then, you can get a tax professional to help you calculate what you should be paying, as each quarter ends. The regular calculation in the 1040es instructions are based on different factors than actual quarter to quarter results. They are based on keeping you in compliance with the law, rather than keeping you paying the actual tax that will be due, based on your actual results.