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How do you calculate how much taxes you will have to pay on your 1099 income? |
How do you calculate how much taxes you will have to pay on your 1099 income? You'll pay the normal income tax that you'd pay on the same income if it was on a W-2, plus paying both halves of social security - on a W-2, half of that would have been deducted from your paycheck, and the other half paid by the employer. The social security and medicare amount will be 15.3% of your 1099 income after your allowable expenses are taken off. Add that to what you'll have to pay in regular income tax, which will vary depending on how much you make and what other income you have. find your own personal math genius to work it out for you try the irs.gov site they may have an online tool you can use. I tell my clients that they should pay 35% with their quarterlies but save another 15% so they can make up the difference when they file at the end of the year. But, this also depends on how much you'll be making. Remember that you'll have to pay 15% for SSI instead of just 7.5% so include that in your calculations. Don't forget to start a SEP IRA so you can contribute a chunk of your salary and get the tax deduction. Good luck! http://www.personalfinance101.org/?utm_s... usually the federal income tax is around 10% unless it is a big number. |
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