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Posted by  JanetK_CA on 2/22/21 3:55pm
That makes more sense. My comments referred to this part of your statement: "Quarterly taxes are different — that money actually goes into your Social Security." If we're going to owe taxes on regular income, then we should be paying quarterly on that income, too.
On a more general note, especially for those new to self-employment, I'm no expert at all this (this is one of my least favorite tasks to deal with and I usually just hand over my data to my tax people), BUT... I've also always thought that in order for our businesses to not be considered a hobby, we have to make a profit (after expenses) after so many years in business and for a minimum number of years out of the total - which probably means some income tax owed. (Check with the IRS or your tax adviser for details.) If expenses surpass income for too long, the IRS can decline all claimed deductions (especially if a spouse or joint filer has employment income), leading to a big bill. Talk about a tax headache!
Maybe there are exemptions or credits that offset this up to a point, but I think it's a good idea to be safe rather than sorry. Like Kimmie, I'd rather over-pay and get a refund than risk penalties.
Just stuff to be aware of...
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