What %age of pay should be held out to pay taxes if sub contractor in SC?

Question

I just moved to south carolina and was hired as a sub contractor. How much is a safe amount to hold out of each check to be sure I have enough to pay my taxes?? I currently rent, am married and have 3 children.

Answer 1

Figure your NET income (after expenses)--here's a link to a schedule C which shows possible deductions). Set aside about 30% of your estimated NET income:
http://www.irs.gov/pub/irs-pdf/f1040sc.pdf

You may also need to make 1/4 estimated payments, here's a link to federal info:
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

You can use tax software to try and calculate your net income and your 1/4 estimates. I believe you can try turbo tax for free (I think you only have to pay if you "print" the final forms).
http://turbotax.intuit.com/

Make sure you check to see if you need a local business/merchantile license, and to file business taxes. You could call a local H&R Block and ask, and ask how to get the forms, etc.

It's sometimes a good idea for newly self-employed people to meet with a tax pro after they've received about 3 months worth of income so that they can figure out how much tax they may owe & figure if they need to send in quarterly estimates. Also to get advice on saving documentation, a mileage log, etc.

Answer 2

The assumption that personal wealth creates jobs is full of crap. Bush tax cuts in force for more than a decade, where are the jobs? By sheer statistics, the bottom 90% of people in any state produce more demand than the top 10%. Businesses and individuals don't hire people because they have a lot of money and are feeling generous, they hire people because they need to in order to maintain or expand their profits. The way this works is via consumer demand. Without a large number of consumers or if they aren't spending enough, there isn't enough demand for businesses to expand and hire more. If consumers don't have enough money, no one expands. Take a lesson from Henry Ford. He paid people not just what they would take, he could have paid them a lot less, but he paid them enough that they could afford the cars they made, increasing demand.

Answer 3

15.3% for social security

The rest depends on your spouse's income and SC state income tax. A good ballpark is around 20% unless you hubby makes great money, then it would be more.