i hear anything for 10-30%
i live in texas
2007-08-20 10:19:01 · 8 answers · asked by kristiW 4 in Business & Finance ➔ Small Business
I was an independent contractor for many years. I held out about 20 to 25%. The reason is that you are double taxed when it comes to Social Security. You pay it all and there is no deduction other than claiming some of what you paid on your 1040. The actual taxes, state, federal and local can be lowered depending on how many dedudtions you take. Work at home, supplies, etc. etc. Good luck. At least you are your own boss and I am sure you will be a hare worker.
2007-08-20 10:30:37 · answer #1 · answered by Irish 7 · 0⤊ 0⤋
Well first it has two parts to it. You will have to pay self employeement taxes on your income which is going to be around 6% and then federal income taxes depending upon your income level 15 to 25% more than likely. Texas has no state income tax so you won't have to pay that. You will need to remit this to the IRS every quarter as well. I would guess that holding 20% would be fine unless you are going to make over $100,000 in 2007.
2007-08-20 17:27:20 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Add the amounts for federal income taxes, federal self-employment taxes, and any Texas or local taxes.
1. See for 1040-ES for the amount for federal income taxes. The percentage depends on how much you make and what you can deduct.
2. 15.3% of 92.35% (this comes to 14.13%) for federal self-employment taxes.
3. In Texas there is no state income tax.
4. I do not know if Texas has a special tax on self-employment income; you should ask them.
2007-08-20 17:29:16 · answer #3 · answered by StephenWeinstein 7 · 0⤊ 0⤋
You should get an accountant. VERY important person in a business. I once was an independant contractor when I had a cleaning service and the small amount I paid my accountant was well worth it. Anything I was wondering about, she could tell me. I sat with her every three months when I paid my anticipated state taxes and I picked her brain.. I live in NY state.. (That's why I no longer have my own business.) Thx NYS
2007-08-20 18:04:13 · answer #4 · answered by Wet Doggie 5 · 1⤊ 0⤋
You will have over 13% just in self employment tax. I would sugest you visit an accountant. There are stiff fines and penalties for not paying taxes in an appropriate time and manner. From a business perspective you need to understand what your tax liability is in order to know how much to charge for your time.
A stitch in time saves nine.
You do not want the trouble you get from paying taxes incorrectly.
2007-08-20 17:42:50 · answer #5 · answered by Willie J 5 · 1⤊ 0⤋
Search for "payroll tax calcualtor" on your favorite search engine. While Texas has no state income tax, your answer will be dependent on how many deductions/exemptions you are claiming for federal tax and your level of income. Back of the envelope guess of 25% is good to start.
2007-08-20 18:13:33 · answer #6 · answered by Daniel G 2 · 1⤊ 0⤋
If you don't already have one, you should find a really really really good CPA, one who does both individual and small business accounting. As a 1099 person, there are deductions, etc. that an accountant can advise you on, and then also, give you a better-than- guesstimate percentage to put away for those taxes.
2007-08-20 17:46:13 · answer #7 · answered by Mabeline 1 · 1⤊ 0⤋
Depending on what your income is, no less than 25%. You then need to hold out another 12% for S.S.
2007-08-20 17:26:39 · answer #8 · answered by cfb193 5 · 1⤊ 0⤋