How much to save out of my checks (1099)

[Derionnaaa]

Hello, 

I recently started a new job at a private practice. The owner of the practice had me sign a W-9 and stated that I will get an 1099. I work part-time at this private practice. In the past two months I have been averaging 2 hours a week at my rate. However I do plan on reaching about 10-15 hours a week at this job. 

My questions are how much should I save out of each check for taxes and when are the dates for paying quarterly taxes? Also, I work full time earn a W-2 at my second job. What ways can I prepare for paying taxes for both jobs? Lastly, how can I find out what tax deductions I qualify for as a part of my W-9 job? 

[JANETB211]

Hello @ Derionnaaa!

Awesome that you can supplement your W-2 job! When you have self-employment income (1099-NEC) you will pay income tax  and Self Employment taxes on the income you earn after subtracting your expenses.  Self Employment tax is 15.3% of your profit.  The income tax rate will be determined by your total income.

The best way to find the amount for your situation is to put this information into tax caster.  You can use a paystub to find out how much tax you have had withheld on your W-2 job.

https://turbotax.intuit.com/tax-tools/

Do you normally get a refund when you file your W-2 job? Will you have expenses due to the 1099 job?

I hope this helps!
JanetB211

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[Derionnaaa]

Hello, 

Thanks for responding to my questions. Yes, in the past I have received refunds for my W-2. Also, yes, I do have expenses related to my 1099. 

You shared that income tax rate is determined by my total income. I was wondering if there were like averages or like ranges for the income tax rate? It is hard to determine how much I will be making in my 1099. My hours vary per week. For example, people may cancel and that impacts how much I make that week. Also, my workload constantly changes. One week I could have completed 2 hours and the next it could be 10. So, it is hard to determine my total income. Unless you mean my total income up to a certain point. 

Is it possible that I could pay at the same time as I do my annual W-2 taxes if my total income from the W-9 (1099) job is under $10,000? If not, what are the dates that taxes are due (the quarterly dates) for 1099? 

[JANETB211]

@Derionnaa, 

You are right about this not being easy!  Yes, there are tax brackets that can help you determine your income tax rate:  https://turbotax.intuit.com/tax-tips/irs-tax-return/current-federal-tax-rate-schedules/L7Bjs1EAD

And on the 1099 income, the best option is to make your best projection when planning your estimated taxes.  However, when you see that your Self -Employment income changes from your projection, go through the calculations again to make changes to your estimated payments as needed.  For example, if you have been estimating based on a certain profit expected, but then you have had cancellations etc, you do not have to send the same amount each quarter.  You can even skip a quarter if your updated projection shows no income taxable after expenses.  Does that help?