How much do I save each week to pay my taxes?

Question

My new job pays minimum wage and does not take out taxes. We claim them at the end of the year and pay them then. I am working for a non-profit place that helps people donate cars to charity. How much should I be saving from each paycheck to ensure that I will have enough money to pay my taxes at the end of the year? My boss told me the girls all save about 15 dollars a week, but that doesn't seem like enough - considering at my current job they deduct about $100.

My new job pays minimum wage and does not take out taxes. We claim them at the end of the year and pay them then (she mentioned something about a 1099). I am working for a non-profit place that helps people donate cars to charity. How much should I be saving from each paycheck to ensure that I will have enough money to pay my taxes at the end of the year? My boss told me the girls all save about 15 dollars a week, but that doesn't seem like enough - considering at my current job they deduct about $100.

Answer 1

This means you are self-employed, and therefore will be responsible for SS of 6.2% and MC of 1.45%, tack on the 10% tax braket and that can add up. First, the the income tax part, deduct $8,600 for the year to account for your personal exemption and standard deduction. If you're working full-time (40 hours a week) at minimum wage:
6.15X2,000 hours = $12,300
less deductions - 8,600
$3,700
10% tax $370
plus fica/ss 7.65% $916
total tax due $1,286
or $26 per week

Answer 2

If you are working full time at minimum wage, you'd make around $14,000 or so for the year, depending on where you live. If you are single, not a dependent, and don't have any dependents, your income tax on that will be a little over $500.

You will also owe a little under $2000 for self-employment tax - that's for social security and medicare. If you were an employee, half would be deducted from your paychecks and the employer would pay the other half - as a contractor, you pay both halves. So that's around $2500 for the year, which would be around $50 a week for federal taxes.

Depending on where you live, there might be additional state and local taxes.

And one more thing - you can't just wait until the end of the year and pay the taxes then, or you will pay penalties for underwithholding. You are required to make quarterly deposits of the tax you owe.

Answer 3

My canned explanation to clueless independent contractors seems to get posted every day: You are the second one today.

A non profit trying to pull this BS? Come on, Get a grip! The idea of being "paid minimum wage" and getting at 1099 simply does not pass the smell test. You should trot over to your state labor commissioner right now because your "employer" is screwing everybody over.

Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. If you are required to show up for work--personally--at a particular time, punch the clock, use the employers equipment and are paid an hourly rate, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired.

Answer 4

A 1099 means that they consider you an "independent contractor" and not an "employee". Therefore, "rob b" is correct and "Gypsy Girl" is incorrect.

Answer 5

Employers are required to withhold taxes. If your employer is not, then you may not want to work for them.