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What do i need to do if I have just started working for a company that doesnt take the taxes out of my paycheck?

What percentage do I need to start setting back for when taxes come around next year?
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1 Reply
MaryK4
Expert Alumni

What do i need to do if I have just started working for a company that doesnt take the taxes out of my paycheck?

The amount you have withheld from your paycheck depends on if you are a W2 employee or an independent contractor (this includes a lot of the rideshare and delivery services currently available).  Generally the amount of tax you want withheld is based on:

  • The total amount of income you earn. (including if you have more than one job)
  • Your filing status: If you withhold at the single rate or at the lower married rate.
  • How many withholding allowances you claim: Each allowance you claim reduces the amount withheld.
  • If you withhold an additional amount: You can request an additional amount withheld from each paycheck.

If you are a W2 employee, you can request a W4 from your employer or use this link to help determine the correct amount W-4 Withholding Calculator.  

 

If you are an independent contractor, you are considered "self-employed" and you must pay additional social security and Medicare taxes (an employee pays one half and the employer pays half).  See Estimated Taxes: How to Determine What to Pay and When

 

Also, be sure to check your state requirements.

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