Our Tax Technique | Woodworking Enterprise Aspect Hustle

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Comments

White Grain Woodworking says:

Something we didn't address: Yes, it's possible for you to do your own taxes. But if you price your time at $30-$50 an hour for labor, you're going to lose too much time you could be making sales with. If you don't have the $500 for an accountant, just make a few sales until you have the money to pay them – that's going to take less time than learning the tax code yourself.

Donald Parent says:

Dig your stuff guys thanks

wags99999 says:

Your not adding in all your overhead, even tooling, when figuring your "cost". This is the single biggest problem new business have. Under estimating overhead and their real cost. If you grown and become a real business, and move out of the house, everything is more expensive…phones, electric, insurance etc etc etc. I've been there done that over the last 50 years, and helped mentor a number of small business since selling mine. At best you will make a living, in woodworking, either stay very small or get very large. Woodworking is too easy to get into business, anyone with a garage is your competitor. And most of them have no clue what their real cost is, so they will undersell you. Once you become a real business and your under pressure to pay not only overhead but employees it stops becoming "fun" and it becomes a job. I suggest most should stay small, do it as a hobby side job, and don't try to move to a rental space and expand…if you want to grow larger, go to work for a shop already in business and learn from them.. Good Luck.

Nuts and Bolts says:

You said that you should set aside 30% to 40% for taxes, but then you said to have a 30% to 40% profit margin. So, your example of the $100 piece you mentioned; $15 for parts, 1 hour labor plus profit margin. Are you supposed to also include your cost for income tax and also charge sales taxes for the materials? I’m thinking that would put it closer to $150 to actually make money on it. Also, do you pay yourself a salary from the business or just pocket all the income? For example, the business makes $100 for an hour of your time, you pay yourself $50 for that time so that you and the business each make $50. That’s a very simple example, not taking taxes into account, and please forgive me for being all nosy about how you structure your business.

Tyler Harney says:

Wow, what timing! I met with my accountant for the first time this morning!

Christian Weaver says:

Solid video guys! Thanks for sharing this!

Willow Run Mills says:

The tree moved at 6:50 🤭

William Rutledge says:

Thanks for reminding me I had eggnog 😂

Phillip Hinkle says:

Ive been self employed for years. Taxes are nothing to fear. I use a bank card or check to buy all my materials and products and ALL income gets deposited in that account. It so easy to organize. Then a bookkeeper does my profit and loss statements and I pay estimated taxes throughout the year so I dont have a large check to write in April. Quickbooks is great.

redcon1gear says:

Side hustle = what taxes?…. 😉

Brandon Terpstra says:

Are you only paying taxes once a year? If so you should be making estimated quarterly payments at least. Failure to do so could potentially result in penalties. Just saying. But then again your accountant should know these things.

Source: accountant

Cyrus says:

This is great timing! I was just sweating taxes for my business last night. Thank you both.

Kris Olof says:

Good tips but why the fake christmas tree? Isn't that like blasphemy for woodworkers?

Dillons Woodworks says:

Yay! Taxes! Lol

synchrimedia says:

i totally use TurboTax. can't be beat ($125?) and I never got a better return by using a tax accountant ($400).

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