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Primer: Personal Income Taxes (sole proprietorships, partnerships) Kentucky

If you operate a sole proprietorship or partnership, you must pay city, state, and federal income tax just like anyone else and you are responsible for paying it directly to the government. Federal income taxes must be paid in estimated quarterly payments. These payments are due in four installments on: April 15, June 15, September 15, and January 15. These federal taxes will cover your self-employment tax which includes social security and Medicare. This self employment tax makes working for yourself expensive because when you had a boss, your employer paid for half your self-employment tax and you paid the other tax. You will now be responsible for all of it, although a portion of it is deductible.

Local Companies

Liberty Tax Service/Louisville Tax Planning
502-966-8417
5005 Preston Highway
LouISVILLE, KY

Lane Communications Group
(859) 244-3531
Lexington, KY

Fortune Business Transfers & Acquisitions
(502) 244-0480
400 Blankenbaker Pkwy Ste 301
Louisville, KY

Wrvg
(502) 868-6565
700 Lemons Mill Rd
Georgetown, KY

Market Review of the Bluegrass
(859) 244-3527
201 E Main St
Lexington, KY

Nexquest
(606) 836-7060
Worthington, KY

Start Up Restart Inc.
(859) 225-0378
1500 Leestown Rd
Lexington, KY

Transmark
(859) 263-1679
155 Prosperous Pl
Lexington, KY

Optimum Performance Group
(502) 583-0200
Louisville, KY

Miller Consultants
(502) 895-0625
627 Upland Rd
Louisville, KY

If your state has an income tax, you must pay it quarterly also. Cities may have their own tax rules.

Generally speaking, you must pay estimated quarterly installments if you expect to owe at least $500 in tax for a given year. The laws governing how much tax you must submit during the year require that you either pay 90 percent of the tax you will owe by the end of the year (to avoid penalties), or pay 100 percent of last year's tax (110% if your income exceeds $150K). This means that you can submit a minimum amount of tax during the year if you want to hold on to some of your money. However, this plan only works if you are able to leave the money intended for taxes alone. Too many people spend the money that they put aside then run into trouble at tax time. If you fail to make your payments on schedule and within these guidelines, you will be liable for penalties -- plus interest on the money you owe.

Your tax preparer should provide you with forms and envelopes for making your estimated payments, or you can order these forms directly from the IRS by calling 800-829-3676.

Featured Local Company

Liberty Tax Service/Louisville Tax Planning

502-966-8417
5005 Preston Highway
LouISVILLE, KY

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If you have business partners, you have the option of forming a partnership instead of incorporating

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Cars	Food & Beverage	Internet	Technology
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Entertainment	Home Appliances	Online Database	Weddings
Environmental	Home Electronics	Pets	World History