Who's good with taxes??

[LiberalDonaldTrump]

I got a independent contractor job for 16 weeks (1099).... does anyone know what percentage of my check I gotta give back at the end of the year .?

[DarterBlue]

To answer the question, one would need more information. The short answer is: it depends, among other things, on both your marginal tax rate and what deductions you take on your 1040.

Your tax rate is driven by your adjusted gross income. Do you have a regular job in addition to the 1099 gig? And if yes, what tax bracket do you belong to? In terms of your deductions do you take the standard deduction or do you itemize? If you itemize, to what extent do the itemized deduction exceed the standard deduction? Other factors include your filing status and the number of dependents you have. Still other factors include whether you have legitimate business expenses that can be offset against the 1099 earnings, which if you do, you would report these on a Schedule C. 

To be on the safe side, for an individual with a day job in addition to the 1099 gig, you should probably pay quarterly estimated taxes at about a 20% rate at the end of the gig. So if completed in the 4th quarter, before January 15, 2018, you should send the IRS a check for 20% of the 1099 amount.  This will reduce the likelihood that you owe taxes, penalties and interest when you file your return later. 

Hope the above helps. If I have not been specific enough, this is because the tax system currently in existence is insane and only benefits: tax lawyers, CPAs, and the sophisticated that can afford to pay for competent, professional advice enabling them to reduce their payment to Uncle Sam. 

[NYHSFAN33]

29 minutes ago, DarterBlue said:

To answer the question, one would need more information. The short answer is: it depends, among other things, on both your marginal tax rate and what deductions you take on your 1040.

Your tax rate is driven by your adjusted gross income. Do you have a regular job in addition to the 1099 gig? And if yes, what tax bracket do you belong to? In terms of your deductions do you take the standard deduction or do you itemize? If you itemize, to what extent do the itemized deduction exceed the standard deduction? Other factors include your filing status and the number of dependents you have. Still other factors include whether you have legitimate business expenses that can be offset against the 1099 earnings, which if you do, you would report these on a Schedule C. 

To be on the safe side, for an individual with a day job in addition to the 1099 gig, you should probably pay quarterly estimated taxes at about a 20% rate at the end of the gig. So if completed in the 4th quarter, before January 15, 2018, you should send the IRS a check for 20% of the 1099 amount.  This will reduce the likelihood that you owe taxes, penalties and interest when you file your return later. 

Hope the above helps. If I have not been specific enough, this is because the tax system currently in existence is insane and only benefits: tax lawyers, CPAs, and the sophisticated that can afford to pay for competent, professional advice enabling them to reduce their payment to Uncle Sam. 

This is an excellent guideline.  However, to be on the conservative side, assuming you live in NJ (per your previous posts)... I would set aside 30/35% of your earnings and pay quarterly at 25%.   If you come in below - pocket the savings

[LiberalDonaldTrump]

1 hour ago, DarterBlue said:

To answer the question, one would need more information. The short answer is: it depends, among other things, on both your marginal tax rate and what deductions you take on your 1040.

Your tax rate is driven by your adjusted gross income. Do you have a regular job in addition to the 1099 gig? And if yes, what tax bracket do you belong to? In terms of your deductions do you take the standard deduction or do you itemize? If you itemize, to what extent do the itemized deduction exceed the standard deduction? Other factors include your filing status and the number of dependents you have. Still other factors include whether you have legitimate business expenses that can be offset against the 1099 earnings, which if you do, you would report these on a Schedule C. 

To be on the safe side, for an individual with a day job in addition to the 1099 gig, you should probably pay quarterly estimated taxes at about a 20% rate at the end of the gig. So if completed in the 4th quarter, before January 15, 2018, you should send the IRS a check for 20% of the 1099 amount.  This will reduce the likelihood that you owe taxes, penalties and interest when you file your return later. 

Hope the above helps. If I have not been specific enough, this is because the tax system currently in existence is insane and only benefits: tax lawyers, CPAs, and the sophisticated that can afford to pay for competent, professional advice enabling them to reduce their payment to Uncle Sam. 

I was looking for a 1 to 2 word answer but this will do,,,,I quit my other job cause it was like a 10 an hour job

 

 

this one now I'm putting in 15 hours of OT a week ... so I'm guessing I'm going to get  raped in taxes

[DarterBlue]

The big problem for many individuals who get paid as contractors (1099s) versus being W-2 employees, is that they are often not aware of the fact that they are now responsible for their own tax remittances to both the Federal and, if you live in a State with an income tax, state taxes. You are a step ahead in that you recognize you have a tax issue. 

If you plan on working as a 1099 person for the foreseeable future, you need to establish what your tax rate (and by extension estimated tax liability) is and start making estimated quarterly tax payments to the Federal (and State, if applicable) taxing authorities. This will help you avoid the pain of a big tax liability and penalties and interest come filing time. To get a handle on what your taxes are likely to be, you need to come up with a good estimate of what you expect to earn from this job each quarter, as well as what expenses (costs of doing the work) can be legitimately deducted from the earnings. 

If you are not an accounting/numbers oriented person, I would suggest finding a good, honest local CPA to provide you some general guidance. It will cost you some $$, but may eventually save you both money and headache. Just be sure you do your homework before finding professional help as they are both charlatans and incompetents out there, as well as competent professionals. 

[LiberalDonaldTrump]

5 minutes ago, DarterBlue said:

The big problem for many individuals who get paid as contractors (1099s) versus being W-2 employees, is that they are often not aware of the fact that they are now responsible for their own tax remittances to both the Federal and, if you live in a State with an income tax, state taxes. You are a step ahead in that you recognize you have a tax issue. 

If you plan on working as a 1099 person for the foreseeable future, you need to establish what your tax rate (and by extension estimated tax liability) is and start making estimated quarterly tax payments to the Federal (and State, if applicable) taxing authorities. This will help you avoid the pain of a big tax liability and penalties and interest come filing time. To get a handle on what your taxes are likely to be, you need to come up with a good estimate of what you expect to earn from this job each quarter, as well as what expenses (costs of doing the work) can be legitimately deducted from the earnings. 

If you are not an accounting/numbers oriented person, I would suggest finding a good, honest local CPA to provide you some general guidance. It will cost you some $$, but may eventually save you both money and headache. Just be sure you do your homework before finding professional help as they are both charlatans and incompetents out there, as well as competent professionals. 

Yea I don't know what I got myself in to .. I was just happy to get a decent job that my pot felony on my record usually fails any job background check 

[Cat_Scratch]

I had used Turbo Tax until I retired and started working for my wife. Now I use H&R Block. They have insurance in case you are audited. They also are up to date on the latest changes, which seemed to be daily now days. When compared to the taxes I did using Turbo Tax I saved several hundred dollars with H&R Block which paid the fee they charge. The fee was a flat rate of 350.00 dollars last year, but it's worth it to me because I like the insurance. 

DarterBlue has good advice. I believe you will also be required to withhold 5% or so for Social Security, though I'm not real sure.

[BigDrop]

1 hour ago, LiberalDonaldTrump said:

Yea I don't know what I got myself in to .. I was just happy to get a decent job that my pot felony on my record usually fails any job background check 

LiberalDonaldTrump, forgive me, but I have to chime in here.

First, as someone who was an independent contractor for most of my 50+ working years, you are going to need to pay Federal income tax (15-25% probable) + state income tax (0-9.5% depending on where you live) + 15.2% for Social Security and Medicare (you will be paying both ends).  You'll be eligible for deductions (1/2 of the Social Security & Medicare) and a lot of other possible business deductions but, at the end of the day, you're going to have to make a quarterly estimate ( https://www.irs.gov/pub/irs-pdf/f1040es.pdf ) for both Federal and state.  These are simple, straightforward and only take a few minutes-only the idea is intimidating but not the actual form.  Problem will be if you have deductions at the end of the year and paying someone to explain/prepare your 1040.  My guess is that you'll be making less than $10,000-15,000 or so and it's not worth your time to get into a lot of this.  At the end of the day it is expensive to be an independent contractor.

Now, the most important part:  your honestly really grabbed me.  I respect the situation you are in.  But, having said this, if you ever walk up the Venice Beach boardwalk you'll seriously wonder about life's injustices.  

I am certain there are a number of apprenticeship programs in various trades that you can get into and, with patience, can in time build a career to be proud of.  I'm old:  but after high school when almost all of my friends were going to college I had a good friend who laughed at us and started a five year apprenticeship to be a steamfitter.  He didn't make a lot of money- for a while - but in time he grew to the point where by age 35 he had 50 or more people working for him.  I have another good friend who is in his '50's today but he started as a dishwasher in his teens, worked in kitchens (but picked and choose where he wanted to learn) and now has won what is called a James Beard Award and owns several restaurants.  I have a brother who is a retired Teamster and drove a "driveaway" for more than 40 years.   I can go on.  But I believe your honesty will open doors for you.  I really believe you should decide what you think you really would like to do and then go after it.   You have nothing to lose by trying.  I think you'll find a lot of people-if you can actually TALK TO THEM IN PERSON-will understand and accept you.

The only ad that I ever responded to in my life was an ad for cab drivers which is what I did to help pay my way through college.  My entire career was built from knocking on doors.

You can do that.  Just be honest and yourself.  And seriously consider what you would really like to do and think that, in time, you could be good at.  Just try to meet the person who can help you, who can open the door. Your honesty, your willingness to work hard and with passion will overcome a lot of life's obstacles.

Really wish you the best of luck.  

 

[concha]

1 minute ago, BigDrop said:

 

you are going to need to pay Federal income tax (15-25% probable) + state income tax (0-9.5% depending on where you live) + 15.2% for Social Security and Medicare (you will be paying both ends).  

 

BTW, Welcome to the conservative movement.

.

[sportsnut25]

1 hour ago, Cat_Scratch said:

I had used Turbo Tax until I retired and started working for my wife. Now I use H&R Block. They have insurance in case you are audited. They also are up to date on the latest changes, which seemed to be daily now days. When compared to the taxes I did using Turbo Tax I saved several hundred dollars with H&R Block which paid the fee they charge. The fee was a flat rate of 350.00 dollars last year, but it's worth it to me because I like the insurance.

I use H&R Block too and get 1099s as well. In addition to what is mentioned in the quoted, they are really great at helping you get ALL the deductions you should be getting. I didn't even realize some things pertinent to my jobs could be considered a deduction. 

Yes the fee will suck but I find it alot easier to let a pro handle my taxes. (Plus I've heard from other people that got W-2's that they got much bigger tax refunds from H&R Block compared to when they used TurboTax.) 

[Rufus69]

Try to file jointly with Trumpy The Clown.  You'll get to keep every penny.

 

 

Rufus>>

[Gospeeder]

LDT... If you were paid as a subcontractor for most of the year, do not overlook your self employment tax which is separate from your ordinary income tax.

[Fred]

15 hours ago, Rufus69 said:

Try to file jointly with Trumpy The Clown.  You'll get to keep every penny.

 

 

Rufus>>

Of course you'll have to put hundreds of millions if not a billion dollars in play on risky investments but hey, if you can play in that league go for it!