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I don't believe I am communicating correctly. What I am speaking about in my previous post is the setup of a S or C corp and calculation/payment of employee related taxes. It is not really that difficult to calculate the taxes owed and even easier to actually pay them but you will need to do some research to determine the actual percentages. An example below:
Income: 10,000
401K Pre-tax contribution: $692.31 (send eft to your 401k trustee; Vanguard, Fidelity, Schwab, whomever as long as it isn't Edward Jones for the love of...) ($18,000/26= $692.31).
Pre-Tax Income: $9,307.69 ($10,000 - 692.31)
Taxes:
Federal Income (33%, Single): $3,071.54 (you will actually make 4 payments a year in this amount times 6 or 7 depending upon the number of pay periods in a quarter)
Federal Payroll:
Social Security- 12.4% ($1,154.15)- Paid every time you get paid. After $118K of earnings this tax ceases for the remainder of year. Note, the percentage is based off paying both the employee and employer rate of 6.2%.
Medicare- 2.9% ($269.92)- Paid every time you get paid. Note, the percentage is based off paying both the employee and employer rate of 1.45%.
FUTA- 1.8% ($167.53) in California- Paid annually. Calculate but pay at same time as 4th quarter estimated federal income tax by January 15th of following tax year.
State Taxes: There are probably more given it is California, but this was a dirty google search.
Income Tax- 9.3% ($865.62)
Unemployment Tax- 3.4% ($316.46)
Employment Training Tax- .1% ($9.30), for first 7K of wages, basically pay once
Disability Insurance- .9% ($83.77), for first $111K of wages.
After-Tax Income: $3,369.4 Amount that goes into your bank every two weeks. Amount will rise as you meet the income thresholds on Social Security and the other state taxes.
Income: 10,000
401K Pre-tax contribution: $692.31 (send eft to your 401k trustee; Vanguard, Fidelity, Schwab, whomever as long as it isn't Edward Jones for the love of...) ($18,000/26= $692.31).
Pre-Tax Income: $9,307.69 ($10,000 - 692.31)
Taxes:
Federal Income (33%, Single): $3,071.54 (you will actually make 4 payments a year in this amount times 6 or 7 depending upon the number of pay periods in a quarter)
Federal Payroll:
Social Security- 12.4% ($1,154.15)- Paid every time you get paid. After $118K of earnings this tax ceases for the remainder of year. Note, the percentage is based off paying both the employee and employer rate of 6.2%.
Medicare- 2.9% ($269.92)- Paid every time you get paid. Note, the percentage is based off paying both the employee and employer rate of 1.45%.
FUTA- 1.8% ($167.53) in California- Paid annually. Calculate but pay at same time as 4th quarter estimated federal income tax by January 15th of following tax year.
State Taxes: There are probably more given it is California, but this was a dirty google search.
Income Tax- 9.3% ($865.62)
Unemployment Tax- 3.4% ($316.46)
Employment Training Tax- .1% ($9.30), for first 7K of wages, basically pay once
Disability Insurance- .9% ($83.77), for first $111K of wages.
After-Tax Income: $3,369.4 Amount that goes into your bank every two weeks. Amount will rise as you meet the income thresholds on Social Security and the other state taxes.
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