topic How do i know how much money to take out for taxes if i’m my own contractor? in After you file

How do i know how much money to take out for taxes if i’m my own contractor?

ally00011 — Thu, 23 Jul 2020 08:06:45 GMT

Re: How do i know how much money to take out for taxes if i’m my own contractor?

xmasbaby0 — Thu, 23 Jul 2020 12:39:56 GMT

You will be paying self-employment tax for Social Security and Medicare--which will be about 15%, plus ordinary income tax. We do not know anything else about your tax situation--so we do not know what -- if any -- tax credits and/or deductions you will be eligible for, or what tax bracket you will be in for the ordinary tax.

But since none of it will be withheld by an employer, you will be paying at tax time, or you should be making estimated quarterly payments to avoid a big tax bill next year.

https://www.calcxml.com/calculators/self-employment-tax-calculator (non-TT site)

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

Re: How do i know how much money to take out for taxes if i’m my own contractor?

Anonymous — Thu, 23 Jul 2020 20:09:26 GMT

if you filed a tax return in 2019 with a tax liability, you can avoid penalties for 2020 by paying in 100% ($110% if 2019 Adjusted Gross income was over $150,000) of your 2019 tax liability. for 2020, 50% of this amount was due 7/15/2020, 25% is due on 9/15/2020 and a final 25% is due on 1/15/2021. your paying estimated 2020 taxes that can be mailed in with for 1040_es or better to register with IRS and use Direct Pay. Using Direct Pay means there are no forms to get lost in the mail but you do have to provide accurate routing and bank account numbers. you can print a receipt. timely payments protect you from underpayment penalties. however, depending on exactly how your 2020 return turns out any of the following are possible:

a small or large overpayment

a small or large underpayment - if estimates are timely paid - as described above - no penalties