How do I calculate taxes incurred on my business plan?
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I am in the entertainment business and I am a sole proprietor.
Any business, from a sole proprietorship to a large corporation, can benefit from a well thought out business plan.
And smart thinking to consider taxes as you plan your business. How much you pay in taxes depends entirely on how much income and sales you generate.
Generally, you can estimate taxes based on 15 percent of your business income for employment taxes (like social security). For actual income taxes for your business income, that will depend upon which tax bracket you are in.
Remember, state income taxes may apply as well. I would highly recommend spending a little time and money meeting with a tax professional to get a good estimate of taxes owed. Sole proprietors often get into tax trouble because they do not understand what their tax obligations are.
In this case, an ounce of prevention is worth far more than a pound of cure.