QUESTION
As a massage therapist do I need to file quarterly estimated taxes in the first year of busines and get a tax ID #?
Asked on Sep 22nd, 2011 on Business Law - Illinois
More details to this question:
I am about to begin as a very low volume massage therapist in Illinois. I have applied for my state license, city license and I plan on filing as a sole proprietor and will have no employees. I will be "renting" a room to perform massages at an established therapeutic massage business. I will perhaps only be working 1-3 massages /week at the most because of time constraints in the first year. This is more of a way for me to get practice in a professional environment versus my small home, as the women I will be renting from will only be charging me a portion of what I charge, while looking for someone to permanently rent the space for a set fee. Additionally, do I need to set up a "business checking account" or can I open a second personal account only?
1 ANSWER
Victor Obninsky
You should get a Tax Identification Number (TIN)from the IRS. This is easily done online. You should report your income and expenses on Schedule C (Income from Business or Profession) which is attached to your 1040. You will also have to file an attachment for computing your Self-Employment Tax (Social Security). If you wish to file quarterly payments during your first year (1040-ES), it might be a good idea.to look at the IRS Guide for Small Businesses. You do not need a special checking account, but you must keep very clear records. A program like Quickbooks is good for this. Good luck. .
Answered on Sep 22nd, 2011 at 1:47 PM