2007-06-08 08:25:25 · 6 answers · asked by POPCORN 2 in Business & Finance ➔ Taxes ➔ United States
If you're getting paid 1099 then you'll be responsible for both halves of SS & Medicare. That's 15.3%. Figure another 14 to 20% for federal withholding (depending on your specifics), and then 10 to 25% of that amount for State withholding if it applies (obviously with more information, I could have given you a more specific answer), but I hope this helps some.
2007-06-08 08:31:26 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Keep in mind that taxes are paid on "net profit" which would mean you need to know what business expenses are tax-deductible from your gross independent contractor income. If there are no deductible expenses your tax "set-aside" is based on 100% of your income and would include at least 15.3% for social security and medicare taxes, at least 15% for federal income tax and an allowance for your state and local income taxes, possibly an additional 10-15%. If you have allowable business expenses (for example about 10% of your income) then multiply the total tax percentages (15.3+15+10 for state = 40.3%) by the 90% of profit. The set-aside needs to be paid in installments on the due dates for estimated taxes (4/15, 6/15, 9/15 of the current tax year and 1/15 of the following tax year)
2007-06-08 09:09:06 · answer #2 · answered by Malcolm K 2 · 2⤊ 0⤋
By "set aside" I hope you mean paid quarterly!
If you are keeping good records, I recommend to my clients that are just starting. It is time consuming, but it gives a very good estimate. This works good for the first year. In subsequent years, if you feel everything will be the same, use the same figures or change them by 10% or so.
I tell them to take a blank copy of 1040, Sch C, SE for the prior year. Prepare it with the figures quarter to date. Subtract what was paid year to date and send in the balance due as a quarterly payment.
Repeat for all four quarters. If you have wages and interest, calculate those into your income and payment figures
2007-06-08 19:53:00 · answer #3 · answered by Mark S 5 · 1⤊ 0⤋
Get a CPA it depends on your number of dependents, annual income, if you claim head of household, if you are a sole properitor or incorporated, and if you own your home. You need professional help and should file your taxes quarterly to lessen the blow and avoid paying any penalities.
2007-06-08 08:32:55 · answer #4 · answered by Lily 7 · 1⤊ 0⤋
You should send in about 35-40% of your net profit each quarter.
2007-06-08 21:51:14 · answer #5 · answered by crazydave 7 · 0⤊ 0⤋
39% of your net profit.
2007-06-08 11:37:34 · answer #6 · answered by acmeraven 7 · 0⤊ 0⤋