Accountantguys/Taxguys, question regarding 1099 wages (1 Viewer)

[CrossEyed2]

So I got a job that pays 1099 wages. Do I need to pay estimated quarterly taxes for federal and/or state/local income? Or can I simply file at the end of the year?

It's starting out at a fairly low rate and my wife is the primary wage earner, if that factors in at all. I'm making $11/hr and working 30 hrs/week.

 

[Controller]

If you didn't have 1099 earnings last year, you should be OK for this year without making quarterly estimated tax payments.

Next year, however, if you still have the 1099 income, you should consider making quarterly estimated tax payments to make yourself penalty proof.

 

[Eminence]

So I got a job that pays 1099 wages. Do I need to pay estimated quarterly taxes for federal and/or state/local income? Or can I simply file at the end of the year?

It's starting out at a fairly low rate and my wife is the primary wage earner, if that factors in at all. I'm making $11/hr and working 30 hrs/week.

End of year.

 

[Pipes]

Depends on your situation.  If you owe more than $1,000 you'll be penalized if you don't have 90% of this year's tax liability or 100% of your 2015 tax liability covered whichever is lower.  Also keep in mind that on your 1099 income you'll be paying Fica and Medicare (both employer and employee) share as well.  That's 15.3% above the federal and state taxes you'll be paying.  Though you're paying your taxes on your next profit so keep track of your legit expenses...probably worth spending some time talking to a tax guy. 

 

[Jayrod]

Depends on taxable income and how much is paid in as a married filing jointly.

Read up on what is and isn't a deductible expense.

 

[James Daulton]

Taxes?  I'd recommend taking the Willie Nelson approach.

 

[Mr. Ected]

Taxes?  I'd recommend taking the Willie Nelson approach.

Trying to find the name for a band and then bolting? What does that have to do with taxes?

 

[Ted Lange as your Bartender]

Depends on your situation.  If you owe more than $1,000 you'll be penalized if you don't have 90% of this year's tax liability or 100% of your 2015 tax liability covered whichever is lower.  Also keep in mind that on your 1099 income you'll be paying Fica and Medicare (both employer and employee) share as well.  That's 15.3% above the federal and state taxes you'll be paying.  Though you're paying your taxes on your next profit so keep track of your legit expenses...probably worth spending some time talking to a tax guy. 

In addition to this, if you can swing it, look into opening up a SEP-IRA.  I believe you can contribute up to 25% of your net self-employed income, which will obviously save you on some of your tax bill.  Plus you have until April 15 the following year to make a contribution so you can see where you stand on your return.

 

[skol asylum]

Seems like alot of work for $11 an hour 30 hours a week. 

 

[CrossEyed2]

Thanks guys. The $11/hr and 30 hrs/week are just for now. Should be at 40 hours by the end of the year and $15/hr by sometime in 2017. 

 

[CrossEyed2]

And, fortunately or unfortunately, no real expenses. It's a total work-from-home deal. So I don't even have any travel expenses.

 

[glvsav37]

talk to your accountant....you can write off a bunch even working from home.

• Internet
• computer equipment
• cell phone and bill
• A portion of your house that you use as your office.

-etc

not sure what your wife makes, but it might be wise to keep in the back of your mind about incorporating (S-corp or LLC). it doesn't cost much to set up and will insulate your personal assets. Although I doubt you are there yet. Plus, there may be some self employment taxes you need to consider.

I have a 1099 business on the side and I had to inc this year b/c with my reg salary, my wife's and the biz, it pushed us into a new tax bracket where my deductions evaporated.

good luck with the new gig