How much taxes & late fee would you pay if you report $18,000 in earned income?

Question

Example if I did NOT file taxes for 2006 and I just now decided to file taxes for earned income of $18,000 as a 1099 form.
For the state of California. About how much money will I have to pay back in taxes and how much will I have to pay in late fees?

Answer 1

1 If you got 1099 (instead of W2), then it is not your salary income. It is Independent Contractor or self-employment income.

2. If you have work related expenses, then you can deduct those expenses to figure out your net profit. If you have expenses, then you will also file schedule C (form 1040) with your tax return.

3. If possible file before October 15, 2007, which is last date of filing for persons who applied for 6 months extension. But even if you did not apply for extension, use this date.

3. Even if you miss Oct 15, 2007 you must file return to avoid serious problems.

5. From your net income (on 1099) deduct expenses to figure out your net profit. Your net profit ($18,000 less expenses) is subject to self-employment tax at 15.3%. Assuming you don’t have any business (work related) expenses, then on $18,000 the self-employment tax is $2,754.

6. If you are Single, then for federal tax your deduction is $8,750. Your taxable income is $9,750. Federal tax is about $1,030. But you will get Earned Income Credit (if you don’t have any other income) and the federal tax liability will decrease.

7. Then there is CA state tax. Also you owe interest and penalty on both the federal and state taxes.

8. In short, file and pay taxes. Do not delay.

Answer 2

Your best bet is to file immediately, regardless of how much you will have to pay. It's better than getting caught later on down the road!

Answer 3

MukatA has a lot of good info. But one comment - if you have a dependent child, he's correct that you'll get an Earned Income Credit, but if you don't have a dependent child, you won't.

Answer 4

are you single? Iof so plan on about 11.76 percent. plus late fees.