Forming an LLC does not lower your federal taxes. Not by a dollar. The IRS treats a one-owner LLC as a disregarded entity, which means it looks straight through the company to you — same Schedule C, same 15.3% self-employment tax, same profit. What an LLC actually buys is a legal wall between the business…
Business expenses are not itemized deductions. They come off on Schedule C, before your adjusted gross income is even calculated, and you get every one of them whether you take the standard deduction or itemize. Taking the $16,100 standard deduction does not cost you your laptop, your software, or your mileage. These are two different…
Moving money from your business account to your personal account is a draw, not an expense. It does not reduce your profit, it does not appear anywhere on Schedule C, and it does not lower your tax by a dollar. As a sole proprietor you are taxed on what the business earned, not on what…
Form 4868 buys you six more months to file. Your 2025 return moves from April 15, 2026 to October 15, 2026. It does not move the payment. Whatever you owed was due April 15, and interest has been running on it since that day. What moves and what does not Two deadlines sit on April…
Every platform feels like it has its own tax rules. It does not. Uber, DoorDash, Etsy, eBay, Upwork, and Fiverr all land in the same two places — Schedule C for your profit, Schedule SE for self-employment tax. What changes from one to the next is only which form arrives in January and which deduction…
The IRS does not care what you call it. It asks one question: were you trying to make money? If you were, it is a business, and your ordinary and necessary expenses come off your income even in a year you lost money. If you were not, the income is still taxable and the expenses…
You owe interest, not a fine. The IRS charges the federal short-term rate plus three percentage points on whatever you were short, and only for the days you were short. Skipping all four payments on an $8,000 tax bill costs about $372. Send what you have today and that number gets smaller. And if you…
Nine US states do not tax individual income at all. Everywhere else, add roughly 3% to 6% on top of what you already set aside for the IRS, and expect a second set of quarterly payments on a schedule your state picks for itself. There is no state version of self-employment tax, so this second…
Both plans stop at the same number in 2026: $72,000. They get there very differently. A SEP IRA takes only an employer contribution, capped at 20% of your net self-employment earnings. A Solo 401(k) takes that same employer contribution and lets you stack an employee deferral of up to $24,500 on top of it. On…
The enhanced premium tax credits expired on December 31, 2025. For 2026 the old cutoff is back, and it is a cliff: if your household income lands above 400% of the federal poverty level — roughly $62,600 for one person, $84,600 for two, $128,600 for a family of four — the credit that lowers your…