How do I find out how much with-holding taxes I should hold out of my daycare payment?

Question

I do child for the state and I get a check every 2 weeks.They do not hold any taxes from the check. I would like to take the taxes out and send it to whom ever I am suppose to send it to,but how so I go about getting the correct amount and what taxes should be taken out.

Answer 1

You'll owe 15.3% for self-employment taxes to the feds. Income tax will depend on your total income (and that of your spouse if you are married and file a joint return), so 30% total for income and self-employment taxes might be close if your total income is not more than $30,000 a year - if more, you'd probably end up owing. It should go to the IRS in quarterly payments. Look at irs.gov for the form 1040-ES and instructions.

Depending on where you live, you probably also owe state tax, and might be expected to make quarterly payments there also. Amount would depend on the state, and on your total income.

Saving it up and paying at the end when you file your taxes will not exempt you from penalties - you're supposed to pay quarterly.

Answer 2

Put 30% of every check into a savings account. Then when you file your taxes next April you will have the money to pay the government.

Or you could call an Accountant and have them figure out exactly how much you need to put aside.

Depending on how much you are making you might have to pay Quarterly taxes. Contact an accountant you might have to pay penalties if you neglect quarterly payments.

Answer 3

you are now considered to be self employed. You will now have to make quarterly estimated tax payments (including self employment tax). You don't have to do it the first year you are in business, because they give you a year to give you something to base your estimates on.

The IRS has a wealth of information on this and many other topics on their website, and I think they have a number you can call with tax questions. It's really not that hard, just a pain more than anything.

http://www.irs.gov/businesses/small/article/0,,id=110413,00.html

Answer 4

Put away a good 30% at least for state and federal taxes. You did not mention which state you are from...some states have no state tax.