Does anyone know how to figure how much tax I need to pay as an independent contractor?

Question

I recently booked a few modeling jobs as an independent contractor and I have never done this before. Is there any easy way to figure how much I owe on the money I made? I just wanted to be sure I put aside enough come tax time. THANKS!!

Answer 1

www.irs.com. You are right to be doing this, because at the end of the year, you will get form 1099 -- and so will the government. You could now be subject to quarterly reporting and, even if you aren't you should do the forms, for they will give you a good idea about how much you should withhold.

Many things will depend -- what state are you in (have to withhold for state too!).

Essentially, you will owe for your income (federal and state), as well as for the employer's portion of FICA (social security), currently 7.5% (plus your portion, for a total of 15%).

I think Fr. Chuck is probably low. To be safe, I would put aside: 20% for federal, 15% for fica; 5% for state and medicare, total 40%. Of course, I am also assuming that you are in a relatively low tax bracket.

Good news, your expenses can be deducted, so keep those receipts.

You can either use the IRS website, or pony-up for an hour of time for a CPA, who can get you on track (I would go to the CPA, as he will know right where to go, and get you the forms and information). It will cost you a couple hundred dollars, but probably worth it. You only need to see him once, so this is like a "start-up" cost.

Answer 2

You will owe income tax on the amount earned at your tax rate - probably 15 or 18%. Then you will owe an additional 15% on the total amount for Social Security Tax. When you are employed, the employer pays half of the SS tax. So in general, figure you need to put away 30%.

Answer 3

Depending on your tax rate,

but you will have to pay all of your social security that is 15 percent before any income tax. So what is your normal income tax level 20 percent ?? 30 percent ?
Also are you going to have any liablity insurance, you hit a nail, it hits a pipe, the water starts a fire and the house burns down. That sort of thing

But you should set at least 33 percent of your income back for taxes.

Answer 4

hey, I'm an accounting student in college right now, tax is my specialty, email me with how much you made, marital status, and number of dependents, I can give you a round bout amount. Basically you will have to pay in estimted quarterly payments towards your tax using form 1040ES. Also be aware there is a self-employment tax of 15.3%, this can get more complicated depending on how much you made. Also you get half of this tax as a deduction too. Just email me and I can tell you more.

Answer 5

You self employment tax will be calc'd by taking the money you made and multiplied by 92.35%. If this is less than 90,000, then mulitply by 15.3%. If more than 90,000, multiply by 2.9% and add 11,160. This will be your self employment tax. You will also have to consider your income tax, which would be based upon your net income, which could be as low as another 10% or as high as 35%. You should consult a tax professional to help you with this as it can get VERY complicated.

Answer 6

Go to your bank and open up a "tax account" based on your income there are tables to tell you how much to with hold, dont forget social security and state taxes. My bank files and sends the funds to the govt quarterly for me.

Answer 7

Hire a tax accountant.

You can deduct certain expenses from your income.

But you will have to pay federal and state income tax, and Social Security tax as a self-employed person.

Answer 8

I did some contracting work. The tax was about 25% ....so be sure not to spend all your money, or come tax season you're screwed!!

Answer 9

Hey Girl,
I know for a FACT that the IRS gets...25% of you reported earnings. At least in TEXAS they do. YEP right off the Tip Top! 25%
YEEE HAAW

Answer 10

You are required to estimate your next quarterly earnings, and pay in advance. If you under estimate, you will be penalized, over estimate, and get a refund. 1099 is the form I think.