2007-06-01 09:58:03 · 10 answers · asked by Gatekeeper 4 in Business & Finance ➔ Taxes ➔ United States
Just self-employment tax = ($94,200 x 12.4%) + ($215,000 x 2.9%) = $17,916.
Income taxes would be over and above the self-employment tax. This amount of income would probably put you in the AMT range. Also, if this is your income, you need to be making quarterly payments to the IRS. If you don't, you will be paying a penalty. At this level of income and being self-employed, you really need a CPA. A CPA will save you more money than their fee.
2007-06-01 10:47:20 · answer #1 · answered by NGC6205 7 · 2⤊ 0⤋
NFC6205 is the best answer so far. Most of the answers so far assume $215,000 is NET income. If it is gross income, you need to subtract business expanses BEFORE you calculate self-employment and income taxes.
2007-06-01 14:17:30 · answer #2 · answered by STEVEN F 7 · 0⤊ 0⤋
Yes you do. I also make money with adsense and affiliate marketing. Your best bet is to monitor your expenses and make sure that anything your buying with that $5K is written as a business expense. Ideally you will need to estimate and pay taxes every year. It is best if you keep track and set the money aside. Otherwise it can get out of control. You definitely want to avoid owing the government money. I am not a CPA or tax professional... so you should run the numbers past someone who is. I also recommend speaking with a business owner about this... someone who has been runninga business at least 5 years. They can help guide you.
2016-05-18 22:31:59 · answer #3 · answered by ? 3 · 0⤊ 0⤋
Self-employment tax is made up of two components. There are two rates... the social security rate and a medicare rate.
The social security rate is 12.4%. In 2006 only the first $94,200 of wages and self-employment income is taxable. In other words, if you earned $50,000 in wages that had FICA tax withheld then you will only need to pay 12.4% on the difference of $44,200 ($94,200-$50,000).
The medicare rate is 2.9%. There is no cap on the rate... so all of the self-employment income will be taxable at that rate.
The self-employment tax is imposed on NET SELF-EMPLOYMENT INCOME, not gross income.
Also, you may subtract 1/2 of the self-employment tax from your income in arriving at your personal taxable income. This results in slightly lower income taxes... but it's a small consolation.
2007-06-01 10:27:45 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Between a quarter & a third, less if you keep great books and use every opportunity the IRS give you to offset taxes.
Self-employment tax is levied at 15.3% on the first $94,200 of earnings, then it gets confusing!
2007-06-01 10:03:16 · answer #5 · answered by Anonymous · 0⤊ 1⤋
Sounds like you're doing a 1099.
You have to pay double the normal W2 amount because you are paying all your own taxes which companies usually cover.
And if you continue, I think you have to start estimating your taxes during the year (quarterly?)
I don't know the amount, but hopefully one of these links can help you!
2007-06-01 10:02:06 · answer #6 · answered by bluvw 3 · 0⤊ 2⤋
75-80 K
2007-06-01 10:01:01 · answer #7 · answered by Anonymous · 0⤊ 1⤋
$17,915.80 (2006)
$94,200 @ 12.4% = $11,680.80
$215,000 @ 2.9% = $6,235.00
Total SE tax: $17,915.80
2007-06-01 10:38:10 · answer #8 · answered by Bostonian In MO 7 · 2⤊ 0⤋
It depends on the person's age, health, number of dependents, and other factors. As a rough estimate, I would guess about $21,500 or more. I would go to H& R Bloch.
2007-06-01 10:07:38 · answer #9 · answered by Max 6 · 0⤊ 4⤋
Depends on your expenses. You can deduct your costs.
www.irs.gov
2007-06-01 10:01:29 · answer #10 · answered by Anonymous · 1⤊ 1⤋