How does tracking my expenses in GoDaddy Bookkeeping help with my 1099-K?

Here is where GoDaddy Bookkeeping shines -- we can show you exactly how much profit (not income) you're making.  Based on that, you'll owe a "total tax bill" comprised of 3 things.

Example -- let's say you have total yearly sales of  $35,000, and the amount in Box 1 on your 1099-K is $35,000.  If you have no record of your Cost of Goods Sold, Advertising Expense, etc. your tax bill will be $9,530!  This total is comprised of the following numbers for Tax Year 2011:

========================================================

Income Tax $4,750 + (25% of profit > $34,500)                       $ 4,875

Social Security (10.4 %)                                                              3,640

Medicare (2.9 %)                                                                         1,015

--------------------------------------------------------------------------------------------------

Total Tax Bill                                                                            $ 9,530

========================================================


However, let’s say that you’ve been tracking your Income and Expenses carefully all year long with GoDaddy Bookkeeping.  You have not just your bank statements showing your Cost of Goods Sold and other expenses total $14,000 for the year, but all of these categorized and correlating to the Schedule C.   Thanks to GoDaddy Bookkeeping, you know your taxable income is $21,000, which means your modified tax bill would be as follows:   

========================================================

Income Tax $850 + (15% of profit > $8,500)                              $ 2,725

Social Security (10.4 %)                                                                2,184   

Medicare (2.9 %)                                                                              609

--------------------------------------------------------------------------------------------------

Total Tax Bill                                                                              $ 5,518

========================================================


That is a total savings of $4,012 or 42% !  GoDaddy Bookkeeping will also remind you when it's time to make your Quarterly Estimated Payments to make sure you don't receive any penalties related to filing.

Have more questions? Submit a request

Comments

Powered by Zendesk