1099 Misc. Form?

Question

How do I know how much tax to pay if I am a 1099-Misc independent contractor?

I make $82,000 a year.
How do I calculate how much Federal, State, Medicare and SS to pay?

Answer 1

If the $82K is your net after business expenses, you'll owe around $11,600 for self-employment tax - that's for social security and medicare. It's calculated on a schedule SE that you'll file with your tax return.

Your income tax on the amount will be the same as if you had made a similar amount from an employer, except that you can take an adjustment for half of the self-employment taxes paid, so it'll be a little less. You don't give enough info to even guess what your income tax will be. If you are single with no dependents, it could be over $13,000, or could be less depending on your circumstances.

You should be filing quarter estimated returns on form 1040EX and making quarterly estimated payments. If not, you'll be subject to penalties at the end of the year, along with a huge tax bill.

Depending on where you live, you might also owe state and/or local income tax, and might be required to file quarterly there also.

Answer 2

You will probably pay between 25 and 33% of the amount left over after your business deductions, depending on which state you live in. Make sure you have a good tax person prepare your taxes because paying Uncle Sam is not a lot of fun.

Answer 3

Plan on holding out 30%. Save ALL your reciepts as most things can be deducted. You will probably have to fork over about 25% when the tax year is done.

Answer 4

you'll have to file a schedule C & sched E with your tax return - =In addition to income tax, you'll have to pay FICA tax of 7.65%, plus any state and maybe local income taxes, so I would put aside 35% or so each week - you will need to make quarterly estimated tax payments to IRS and your state or risk getting penalized for under payment of taxes - talk to a CPA or tax preparer asap