How to fill out tax form 1040
How to Fill Out Form 1040-ES
By Maire Loughran. Arts/Crafts Business Expert
Every attempt should be made to send in Form 1040 tax returns with a balance due of less than $1,000. To achieve this goal, if you are an arts or crafts business owner operating as a sole proprietor or flow through entity such as an S-Corporation or partnership, you use IRS Form 1040-ES to make tax deposits throughout the year.
There are four depositing dates during the year. The first is April 15 - a date I usually miss since I'm more concerned with getting my client's tax return work under control.
However, if you had a great first quarter sales at craft shows or selling wholesale, it is important to not let this depositing date go by. April 15 is followed by June 15, September 15 and the last depositing date for the year is the following January 15.
Entering Information in the 1040-ES Form Fields
It's very easy to fill out the form. Checking out the image of the June 2011 Form 1040-ES on this page, you fill in various bits and pieces of your personal information (name address and social security number). A question I get a lot from my arts and crafts sole proprietorship clients is whether they should enter their spouse's info too. If you file a joint return with your spouse, regardless if they work in or are associated with your arts and crafts business in any way, you need to also enter their name and social security number on this form.
forget to fill in the amount you are paying with this deposit! That figure goes in the top box on the right-hand side of the Form 1040-ES.
Figuring Out How Much You Need to Deposit for Your Arts and Crafts Business
Until the end of the year, this is a guess at best. However, what you need to do is figure up how much you owe in income and self-employment taxes as of the depositing deadline. For more information on how to do this, I have written an article which walks you through a quick way to figure your estimated tax deposit amount.
The Form 1040-ES package also has a couple of pages of instructions (page 5 and 6). Keep in mind any seasonality of your arts and crafts business revenue. I know I make half of my arts and crafts business income in the 4th quarter holiday season, but I try to estimate and spread my depositing over the four depositing deadlines, making up the different with the January deposit.
Paying the Estimated Taxes for Your Arts and Crafts Business
Make a copy of the Form 1040-ES, then you can mail the form 1040-ES to the Internal Revenue Service with a check or money order. For meeting the deadline, the mailbox rule applies. If your estimated tax deposit is due April 15, as long as your envelope is postmarked April 15, your estimated tax payment is made in a timely fashion. You can also electronically file your 1040-ES coupon and payment using a credit or debit card or electronic funds withdrawal (EFW).Source: artsandcrafts.about.com