Anyone have experience with 1099 income?

[love1999]

How much of this should I expect to lose come tax time?  I did a little part time work while unemployed and my total pay was between $600 and $700.

[msmerymac]

It's really hard to say, not knowing your entire tax picture. Let's say I make an average, though not great, salary as a 1099 and I put 1/3 of it into taxes. Based on what we did last year, that was about right. Based on the fact that we now own a house and some other stuff, I might get a lot of it back this year. My husband also zeroes out his deductions on his W-4.

Depending on whether or not you usually get a refund (were you on unemployment? Did you have taxes deducted for that?) it might be a wash. It might be $200? Don't know.

[litebright]

I get paid through 1099. We set between 30-40% of it aside to go poof for taxes.

[LoveTrains]

Do you have any business expenses you can use on the schedule C to offset the income on the 1099?

[Deleted]

It really depends. When I was single and not making much, I could file a 1099 and still get a refund. Now joint filing with my (much higher-earning) DH? Forget it. It's like it's not even worth earning it.

[love1999]

I've got to figure out the business expenses thing and see if anything qualifies. I did use my home computer and Internet some.

The unemployment is set to have taxes taken out of it so hopefully I'm covered on that. I lost a huge chunk of my severance since it was taxed as supplemental income so I think I will have overpaid taxes this year as is. Plus I still have regular W2 income both before and after the period of unemployment. I just did this little part time gig for a couple of weeks to help out a friend until they could find a permanent replacement for someone who left. It reduced my unemployment payments so I'm really hoping I'm not going to regret doing it because I'm going to lose most of it to taxes.

[turtletop90]

Aug 22, 2014 17:22:29 GMT -5 litebright said:

I get paid through 1099. We set between 30-40% of it aside to go poof for taxes.

When H was freelancing we did the same thing. And it did all go poof. We have high state taxes in CA (13%), FWIW.

[skib]

I usually plan to pay 25% in taxes, but I live in a state with no state income tax.

[my3bears]

You have to pay the employer and employee sides of FICA (soc security taxes), which is about 15% right there. Add in 10% for federal income taxes given that your income was less thank 10k, you're at 25%. Then you have to factor in your own state and local taxes, which you can find out from an internet search or asking around. 

For me in PA, I'm at 15% for soc security taxes, 15% income taxes since I earn more than 10k, 3% PA taxes, but no local income taxes thank god. So 33%. The only good thing about being self employed is you can reduce your taxable income by deducting business expenses. For me that's mileage, internet, phone, ink, books/materials, and costs of maintaining my clearances and licenses. So make sure you look into any deductions you might have!

 

[redpenmama]

Aug 22, 2014 17:22:29 GMT -5 litebright said:

I get paid through 1099. We set between 30-40% of it aside to go poof for taxes.

Me too. In addition to federal, I pay 6% state and 2.25% city.