My husband is about to start a job where he is classified as self-emplyoed. His salary will start at $31k per year. I am a student, and we have 1 daughter. About what percentage should we set aside for taxes? (I know you can't give me an exact answer, but I just need a worse case scenario)
2007-01-24 08:32:11 · 2 answers · asked by mountain_laurel1183 5 in Business & Finance ➔ Taxes ➔ United States
Worst case: $6,363, or about 21%. $4,723 for SS taxes (15.3%) on the whole amount and $1,620 for Fed income tax on the $10,800 above the standard deduction and your 3 exemptions.
You'll need to make quarterly payments of about $1,591.00
This estimate is high. Your tax preparer can give you more accurate figures based on your actual income.
The answer above me does not include SS tax for being self employed and incorrectly used your gross income on a table intended for for taxable income.
2007-01-24 08:57:11 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
If he is self-employed, he should be making quarterly estimated tax payments throughout the year (also to your state of residence if they have an income tax). You can't just set this money aside - it has to be mailed to the IRS. His tax preparer can help him determine what his estimated payments should be. Ignore this and there's a possible penalty (personal experience; we underpaid last year and got hit with a penalty).
To determine your tax, you must figure out what your adjusted gross income is. Here's the tax tables for 2006. An adjusted gross income of $31000 for a married couple filing jointly owes federal tax of $3891. Here is a link to the tax tables for 2006.
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf?portlet=3
2007-01-24 16:51:14 · answer #2 · answered by Kraftee 7 · 0⤊ 2⤋