New to 1099 work, trying to figure out taxes

[jfoxcpacfp]

lmbebo wrote:

Thanks.  So 33% plus the added state income tax.  So around 40%.

Click to expand...

That should get you there.

[lmbebo]

Thanks.  So 33% plus the added state income tax.  So around 40%.

 

 

[jfoxcpacfp]

1. Set up a SOLO-k, not a SEP, so you can still make backdoor Roth IRA conversions.


2. You're trying too hard to get this down to dollars and cents. Just set aside 40% of your net profits if you are an attending, 1/3 if you are still in training. Tweak a little if you will also owe state income taxes.


3. How to figure taxes for a side business post on my blog

[lmbebo]

Hi

So I'll be starting to do some 1099 work on the side this fall.  Just wondering how to figure out the taxes, so I know how much to set aside but also how much I'm really gaining from this.

I'll have W2 income as well.   Biggest issue I have is out to handle the self employment tax wth my W2 income.  Do I just withhold 6.2% for the employer Social Security, 2.9% for medicare and 0.9% for everything above 200k?

Example I made up:
1099 income of $80,000

Business deductions of $8000

SEP IRA contribution of 14,400 (20%)

Self Empl Tax (9% instead of 15.3%) of 5984.28 (calculated the 1099k income minus deductions)

Taxable income of $54607.86 (80k - 8k - 14.4k - 5984 ?)

Fed income tax ( still confused on this ...do I just put in what tax bracket I'll think I'll be at? -- I assumed a marginal tax rate of 27% -- 14,744.12

state income tax of 3139 (5.75%)

so take home would be around $36,723.79 for the year?

 

Thanks