I started a new job and my employer is paying on a 1099, what is the percentage I should set aside for taxes?

Question

I just started new job as a flight attendant, my employer is paying me aprox $ 400 per flight plus $65 per diem, I also have to drive around 65-70 miles(roundtrip) to the airport. What is the percentage that I should start setting aside so when I have to pay taxes I dont have to take out a lump sum. I believe I am not in a very high tax bracket and I dont have any dependants either? I also would like to set up an account with my bank to start saving the money but I am not sure what percentage of my income should I set aside every week asuming that I am making $700 plus $65 per diem.

One more detail, I am live in Florida I dont know what is the state tax here,

Answer 1

Set aside 15.3% for SSI, 10% for FWT, and whatever your state tax rate is. Mine is 6%, but that may not be true in your case. Consequently, if I were in your shoes, I would be setting aside 31.3% of my pay for taxes.

Answer 2

You will have to make estimated quarterly payments for your taxes using form 1040ES for federal. If your state has an income tax, you should probably make quarterly payments there also.

First of all, set aside 15.3% of your net income for social security and medicare. Net income is what you make after subtracting expenses. Your drive to and from the airport from home is commuting to your main place of business, so that mileage wouldn't be deductible.

You don't say what state you're in, but if your state has an income tax, you'd have to pay it at whatever your state rate is. Some municipalities also have an income tax.

Federal income tax depends on your total income for the year. I'm a little unsure of what you're saying that your total income for the year is. If you're saying $700 per week plus $65 per day for five days in the week, then that would be a little over $1000 a week, and you'd pay around 15% of that overall for federal income tax.

It's somewhat hard to picture a flight attendant job that would legitimately be considered a 1099 job - more likely you should be classified as an employee and have taxes withheld, the employer would pay the social security match (he'd pay 7.65, you'd pay the same instead of 15.3%), and you'd get a W-2 at the end of the year rather than a 1099.

Answer 3

Number 1, if they are paying you on a 1099 they are not your employers period! You are self employed and will be responsible for all FICA and Medicare Taxes. I would at least pay in 30% to the Federal plus you average State Withholding Rate. You will probably have to file a schedule C and I am not sure if your mileage would be a deductible expense at the Federal Rate as the IRS may consider it a commute. This off the top of my head as I am not going to look at the regs right now. Another safe harbor would be to pay 100% of your prior years income tax in. Remember to make estimated tax payments on Form 1040ES which are due April 15, June 15, Oct 15 and January 15 next year.

Answer 4

I recently started a work assignment cleaning a office building, part time. I am not told when or when I have to be there, basically I do it on my own. I am not employed by them and not a small company either, just working on my own I guess as a contractor. When I started they gave me a 1099 form to fill. Since, I have received 2 checks, and don t know how much to put aside for taxes. In Florida I only pay federal and s.s. taxes. Would it be safe to take about 20%?

Answer 5

Are you really an "employee" or a "contractor". If you are an employee, your company (airline) you work for should be paying you on a W-2, not a 1099, and more importantly, the employer must pay half of your Social Security and Medicare Tax. Some employers mistakenly treat their employees as contractor to avoid paying their half of these payroll taxes.

Revenue Ruling 87-41 lists 20 factors used to determine if a worker is an employee or a contractor. If you have to follow instructions about where, when or how to work; if you personally perform the duties; if you work for only one company at a time-- you might be an employee and your employer should be paying half of your payroll taxes.

See IRS Training Material Course 3320-102 which is available on the IRS web site (www.irs.gov)

Answer 6

How can they pay you on a 1099 as a flight attendent? Your not an idependent contractor. Call the IRS.

Get last year's version of Turbotax software, plug in your data (like it was 2006) and estimate what you will make this year. Once the return is complete it will produce 1040-ES estimates for you. Make those payments. Since you missed 04/15 and 06/15 pay both now.

Answer 7

IF things worked out as stated, you'd have about $21,850 taxable from $31,200 income (taxed at the 15% rate), or about $800 for each quarterly estimated payment you'd make on IRS Form 1040-ES ...

Answer 8

25% for taxes nd another 7% for Social Security.
Yep, 33% of everything you earn is taken away from you.