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Booth Rent Question :)
#1
I am currently booth renting in a salon, very very part time. Only 2 days a week usually 1 or 2 clients each day of the week. I work another full time job, so I am still just starting to get started at doing nails . (been licensed since 2006)
I am just curious, how much should I be putting away for taxes for next year?? I save all my receipts for everything purchased and keep records of how much I make for each service and how much rent I am paying.
Is there an average percentage of my income that I should keep in mind? Currently I do not pay myself with my earnings, it sits in a bank account to buy supplies and pay my booth rent. When I get to a point where I can actually start paying myself with it though, I want to keep enough in there that I do not need to come up with money to pay taxes when that time of year comes around Smile
Thank you so much for your time and input Smile
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#2
I'd say 25-30%. You'll probably have some left over, which is a good thing!
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#3
Great question!!!!! Your income from your full time job will be combined with your nail income, so it depends on how much you make and pay in taxes with the full time job. Find out what percentage you are paying now and increase it some. Wonder if you could just withhold more from the full time job to compensate for the nail job? Hmmm, something to consider?

Does someone do your taxes? They should be able to tell you what percentage of tax you are paying. If not, then you can figure on a high scale for self-employment income is at least 15%.

With your limited number of days and clients it shouldn't affect it much, but better safe than sorry, right? And after the first time you do this you can better tell by how much you either pay in or get back at the end of the year as what you do the next year. Hope that makes sense.
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#4
It really depends on a lot of things - do you have to pay State income tax or just Federal? For federal don't forget the self employment tax which is 15.3% normally (13.3% this year again because of the tax break that was extended) that you have to pay in addition to the regular income tax. For me, all of our deductions, exemptions, etc are used up with my husbands regular income, so I start off right at the 15% tax bracket, but after a certain amount in profits I get bumped to 25% - so I go from 28.3% (this year) for the first bit, then to 38.3% for the remainder.

Look at your household income (total) from regular wages, less the estimated deductions and exemptions. You can see on the IRS website where the tax rates change from 10% to 15% to 25% etc. Once you know what bracket your nail profits are in, that will tell you how much to withhold, based on your net profits.
Candice
Nail Tech/Owner
http://www.PanacheNailStudio.com
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