1099-Misc estimate?

Question

I've received a 1099-Misc and would like to estimate how much I must pay for taxes. My taxable income for this year will be within the 15% bracket, with no chance to go outside of it.

Ok, so I'll have to pay 15% for federal taxes right? Then I'll have to pay an additonal % for state, do I also have to pay social security? Any others? What I'm really looking for is the exact percentages I'll have to pay.

Answer 1

VERY rough guess: 15.3% of the net (after business expenses) amount for SS tax. Then subtract $8,450 from the net and take 15% of that. Add the two. That's the Federal bite.

Then you'll also have state taxes as well. 2% - 8% are typical but there are about 45 states with income taxes and each is different.

If you didn't pay estimated taxes throughout the year (1040ES) there will be late payment penalties & interest on top of it all.

VERY rough total guess: 32% - 45% of the total including penalties and interest.

Answer 2

Can't really give you exact numbers. You won't pay a full 15% income tax on your 1099, even though you're in the 15% bracket, unless you have other income that has you there already, then you will. If the 1099 MISC is your only income, you'll have your exemption, and standard or itemized deductions to subtract first, then some of what's left will get taxed at 10% and some at 15%. If you have any deductible expenses connected with earning the income on the 1099, that'll get subtracted first on your schedule C from the 1099 income before you even start figuring your tax.

Social security - if you don't have other income that already has you at the max for the year for paying social security, then yes, you'll owe that, and will be paying both the employer's and the employee's half. Rate is 15.3%, and that is calculated on 92.35 percent of your schedule C net income. Then you get to take half of it as an adjustment to income back on the 1040 - yes, it sounds complicated, but it's really not hard to do, just follow the instructions for each line on the form and it tells you what to do.

State tax - depends on where you live. Each state has different rates, and some don't even have an income tax.

Good luck. Turbo Tax or something like that could help.

Answer 3

1. If your income for last year (2011) was low enough that you had no income tax for that year and no self-employment tax for that year, then you probably don't need to pay any estimated tax for this year (2012). Generally speaking, the required estimated tax payment is $0 if there was no tax for the previous year. 2. In a year when you are supposed to pay estimated taxes, and you have not paid any by this time in the year (October), then you should immediately pay 3/4 of the year's estimated taxes, and pay the last 1/4 by January 15. 3. Regarding the question "How am I supposed to estimated my tax if I didn't even know it would grow that high? It was an unexpected increase in earning": You can use the "annualized income method", which means that the payment due April 15, 2012 is based on 4 times earnings from January 1 to March 31; the payment due June 15 is based on 2.4 times earnings from January 1 to May 31; and the payment due September 15 is based on 1.5 times earnings from January 1 to August 31. This eliminates the need to know how high it would grow and solves the "unexpected increase" problem. However, almost no one uses this method, because keeping track of income on a monthly basis is too much of a pain.

Answer 4

There is a "standard deduction" to offset income. That's for people that don't itemize. Since you are a 1099 taxpayer (assume you are a schedule C) you will have self-employment tax of 15.3% on your NET income.

Don't forget any expenses you incurred while you are doing your work. Office supplies, rent, auto expenses, MILEAGE, utilities are all legitimate deductions and they can really add up.

Get Turbo Tax if you don't use a tax preparer. However, NEVER go to H&R Block. I have seen their training and from my experience they are a bunch of twits that don't know tax law. They will also hire people that flunked the final exam (70% to pass).

Answer 5

Depends what the 1099-M was for. What kind of payment was it?

The self employment tax is 15.3% which includes SS and medicare tax doubled.

Answer 6

If you are in the 15% bracket for federal, then you will pay 15% for federal. Your state percentage will depend on what bracket you are for state and which state you live in. For social security, you will be paying both the employee and employer portion, so you will be paying 6.2% x 2, or 12.4%. Finally, for medicare, you will also be paying both the employee and employer portion, so you will be paying 1.45% x 2, or 2.9%.