How can I calculate my taxes?

Question

I was rencently employed by a company that doesn't give w-2 forms, instead they give form 1099. so I have to deduct my own state tax. I just don't know if is 15 or 20%
Please HELP!
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Answer 1

Alrighty then

--time to see if your employer is committing fraud. You don't get a "choice" between w-2 and 1099.

1099s are given only to "independent contractors", and here are some guidelines to determine whether you yourself were an employee or an independent contractor (self-employed).

The following suggest an employer-employee relationship:

--You comply with detailed instructions from your employer
--Regular written or oral evaluations on performance
--Continuous employment (as opposed to occasional or sporadic)
--You lack control over your work environment
--You have no risk of business losses
--You have no benefit of business profits
--Your income does not fluctuate
--You have no control over your payment rate (you can't raise your fee)
--You have no control over the number of hours you work
--You have no power to delegate or train your own employees to do your work for you
--You work for only one employer, and you don't advertise or solicit others to do the same work

The following suggest a self-employed (independent contractor) relationship:

--You have a business license
--You advertise with a business name to get work
--You can refuse any job without risk of losing ALL of your income
--You have control over your work environment, hours, the tools you use and the people who work for you
--You show up to work whenever you want to and leave whenever you want
--You have complete control over the quality of your work, designs, routines, and/or standards

**Another important distinction is that independent contractors often do work for companies that the companies themselves aren't in business to do. For example, a retail outlet is in business to sell things, not to fix their own machinery or plumbing or do their own taxes or legal work. They will hire out to other companies to do this for them. If you are doing work that your employer is licensed to do, you're likely an employee, and you're employed to carry out the primary operations of the business.

If you were to be audited by the IRS, this is the list of items they'll use if the question arises. All you have to do is look at these lists and see which one predominently describes you and your work. You can also look at your own intentions. If it was never your intention to go into business for yourself, you're likely an employee.

(If your employer told you up front, when you were hired, that you would be self-employed, then you're likely self-employed.)

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Having said all of that, here's a list of taxes you have to pay.

As an employee:

--Federal income tax
--State income tax
--FICA/medicare
--employment insurance (workers' compensation)

As an independent contractor:

--Federal income tax
--State income tax
--Self-employment tax
--SUTA (for your employees only)
--FUTA (for your employees only)
--FICA/medicare (for your employees only)
--employment insurance (workers' compensation--for your employees only)

Each of these is calculated differently. You can e-mail me if you want to for more information.

(If you're really an employee, and your employer is sending you a 1099, they might be committing fraud, and they're setting you up for a tax nightmare. You have until April 15 to pay the taxes you're responsible for. After that, you can face some severe penalties.)

Answer 2

when you fill out your state tax forms you will figure the amount you owe

you will also be paying self-employment tax, (social security)
so you will put your earnings from 1099 on Schedule C or CEZ and also fill out Schedule SE. Don't forget to take a deduction for 1/2 of the self-employment tax on line 27 of form 1040.

don't know if you should have received a 1099 or W-2, but you have what you have,,

Answer 3

Since I don't know what state you are from this is difficult to answer, however, let me worn you. If you are getting a 1099, you are considered self-employed and you will have to pay SE taxes on your 2007 tax return. That is 15%, plus income tax, plus state tax. Keep very accurate records of any expenses you have related to this job so they can be deducted from the income. SE tax can be a killer if you aren't expecting it. Best to check with your tax consultant and be prepared. You will probably need to make estimated payments throughout the year. Good luck.

Answer 4

See http://www.taxadmin.org/fta/rate/ind_inc.html for state income tax rates in the various states. Doesn't look like any are over 10%.

Of course, you'll also have to deal with the federal income tax, and that depends on how much your total income is for the year, plus you'll owe 15.3% in self-employment tax.

Answer 5

You should be able to go on-line and get that info from your State
www.irs.gov, "states" in search box, click on link to your State,
"taxation" and go from there.

good luck & bless