About how much money would you owe, making $35,000.00 and getting a 1099 form?

Question

What kinds of things can I write off. I have never benn 1099ed before and Im really scared that Im going to get in tax trouble. Should I request to change to a W2? HELP!

Answer 1

As an independent contractor, you are responsible for all taxes on income, hence the prior answer is correct. You won't get into tax trouble as long as you follow all the instructions in the 1040 forms, or use TurboTax or TaxCut. One thing that will likely happen, tho', is that because your tax liability will be large, and you had nothing withheld, that you will likely be asked to file quarterly estimated taxes. If you have the option of becoming an employee, an hence, getting a W-2, I'd do so, since you can tailor your withholding amounts (via the W-4 form) to break even.

Note that your employer might not be in favor of converting you to employee status because his taxes increase considerably, and you become eligible for unemployment insurance.You might have to take a pay cut to get employee status.

If you are asking what you can write off, either you are going to spend a lot of time reading the 1040 long form instructions (which are very thorough), or you should use a tax preparer, or better yet, use tax prep software mentioned above. I have used TurboTax for 15 years (plus the cost of the software is, itself, tax deductible.)

Good luck.

Answer 2

A 1099 means that you are not a direct employee of the company. Switching to a W2 would require you to be employed by the company. (something they will not want to do, as it saves them a lot to have you as a contractor).
first of all, you are responsible for your social security and medicare. As a 1099, you have to pay both the employee and employer share which totals 15.78%. (half of this deductible)
So you will have to send in $5,500 for that. Then you will have a tax liabilty as well, assuming you have minimal deductions, it would not be unusual for you to owe anothe $5000 in federal tax. If you did not file quarterly tax estimates, the government is also going to charge you interest.
Sorry for the bad news.

Answer 3

well, bear in mind, I'm no tax advisor...
but it depends on what you're being 1099'd for as to what you can use as deductions, and what you'll pay in taxes depends on your deductions. You're probably going to be around 15% tax...but not off of the whole $35K--off that amount minus money spent in order to do your job.

According to the IRS website You can write off 44.5c per mile for any business miles driven--or your can write off car expenses (gas, repairs, etc)
Business lunches/dinners/meeting expenses
Cost of materials, books, supplies
money given to charity
Student loan interest (there are rules for this, though)
Educational expenses related to your work (seminars, conferences, etc.)
Mortgage loan interest.

well, there are a lot of other things that may apply to your situation too. My best advice is to spend the couple hundred bucks to hire a tax pro, and have him/her help you prepare for next year. There are advantages to being 1099'd...but it does help to plan for your taxes throughout the year, and keep track of receipts, etc.

Good luck
Kat

Answer 4

Well....just looking at self employment tax (SS and medicare), you are looking at 15.3% of your net self employment income. You do get a deduction for 1/2 of your self employment tax for regular tax purposes. The actual amount taxed for federal income tax would be based on your itemized deductions (if any) or standard deduction for your filing status, whichever is higher. Then also subtracting out your personal exemptions, you would get the taxable income number that will be used to determine your tax. And this is only accounting for federal tax. State tax is dependent on which state you live in.

Assuming single, with no dependents, and no itemized deductions, for federal alone you are probably looking at $4,945 in self employment tax and federal income tax of $3,203. So your total federal tax bill will be $8,148, which is roughly 23%. Adding in state tax, you could be looking really close to 30% tax in total.

Also, if you were a contractor for the entire year and did not make any estimated tax payments, you will also be hit with a penalty for underpayment of estimated tax. The IRS requires that you pay in, either through withholding or estimated tax payments, the lesser of 90% of your current year tax, or 100% of your prior year tax. If you do not meet this requirement, the underpayment penalty is equal to the interest accrued on the amount underpaid for the period underpaid.

Answer 5

I would suggest that you do estimated tax payments every quarter next year because if you don't have a lot of deductions to claim you are going to owe quite a bit I am affraid to say I only made about 28000 and paid in about 6500 granted some of I will get back but I have a lot of deductions also! Best of Luck

Answer 6

If you still expect to be paid eventually, or at least still expected to be paid when 2009 ended, then you report the $1800 as income earned in 2009 (even though not received yet). If you realize later than you will never be paid, or realized this during 2010, then you deduct the $1800 as a bad debt for the year when you learned or will learn that you are not going to be paid.

Answer 7

The benefit of being an independent contractor (1099) is the amount of business-related deductions you can take to reduce your taxable income.

Here's a list:
http://www.irs.gov/taxtopics/tc500.html

You'll probably pay between 18-35%.

Answer 8

You'll have to pay all the tax on the $35k if you did not ask for any to be withheld. Depending on your circumstances, the tax could be anywhere from 18% to 30% of the total.

Answer 9

whomever does your taxes will be able to figure this out for u quickly...or call a tax preparer.roughly, i would figure about 10%.write offs and deductions definetly u will
need a tax preparer depending on the type of work u do....

Answer 10

35000 times .20 =7000 you'll get a little back

u will get monny back