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Tax Advice Requested: 1099 Related

tigeo

Autocross Champion
Yeah so maybe my terminology was wrong....she wasn't offered a "position", but rather hired in a contract that my brain turned into a position...lol. I appreciate the insight...taxes are half my worry; not knowing how much to hold back each paycheck.....guess I'll look for Fed/State percentages and go off that. I'll check that site out as well...thanks!
Take your last year's 1040 and calc your effective tax - total tax (line 24)/total income (line 9) and see where you land, should be in that ballpark but of course taxes are so variable just make sure you include social security/medicare in your total tax if you are a W2 and don't forget state - you really just want all the taxes you paid (not witheld!) divided by your gross income. You can also (if you use it) just take the Turbo Tax software and run a "simulation" assuming her income but no estimates paid and that will tell you about what it's going to cost of course assumption is tax law will stay the same. Again, there is a bit of guess work here. I know folks that are 1099s that have no clue and when they get that tax bill in April they shit - don't be them, hold some back and at least make a calculated effort at getting it close. I have seen others hold way too much back (40-50% which is crazy high) and giving the man their money for free for the year. ~20% is going to be about right for lots of people.
 

swcrow

Autocross Champion
Location
Virginia
Car(s)
7.5 GTI
Take your last year's 1040 and calc your effective tax - total tax (line 24)/total income (line 9) and see where you land, should be in that ballpark but of course taxes are so variable just make sure you include social security/medicare in your total tax if you are a W2 and don't forget state - you really just want all the taxes you paid (not witheld!) divided by your gross income. You can also (if you use it) just take the Turbo Tax software and run a "simulation" assuming her income but no estimates paid and that will tell you about what it's going to cost of course assumption is tax law will stay the same. Again, there is a bit of guess work here. I know folks that are 1099s that have no clue and when they get that tax bill in April they shit - don't be them, hold some back and at least make a calculated effort at getting it close. I have seen others hold way too much back (40-50% which is crazy high) and giving the man their money for free for the year. ~20% is going to be about right for lots of people.
Imma call you lol
 

tigeo

Autocross Champion
Imma call you lol
Happy to chat if you would like. It's not complicated but does require some work/thought if you want to do it right.
 

The Fed

Old Guys Rule
Location
Florida
File electronically this year because the IRS still has a huge backlog of returns from 2020. Would be nice if I can get my 1099s by then.
 

tigeo

Autocross Champion
You'll also need to conduct meticulous/informed accounting throughout the year to take advantage of the numerous write-offs available, as well as minimize your taxes.
This is how I've done it as a sole proprietor/LLC for the last 5 years....meticulous record keeping and copious amounts of time researching/understanding the tax side of it. It's worked out great.
 
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