Married / filing jointly -> W2 (myself) & 1099-MISC (my wife) -> What's her exact tax rate?

[86hertz]

My wife made ~14K this year in 1099-MISC's, setting 50% aside for the taxes.

I was fully employed, meaning I have a W2 form on hands.

We are filing as "Married / filing jointly". After entering all numbers I see an estimate of the return (federal + state).

The question is, given what stated above, what's her exact tax rate? Is it possible to calculate it? We want to know how much money she needs to pay out of the 50% she set aside.

[Carl]

There is no exact tax rate for her alone on a joint return. Your tax rate is determined by the total income reported on the joint return, regardless of where that income is from.

But at a minimum, if your wife has more than $400 of taxable self-employment income, she will pay the 12.6% self-employment tax on that taxable business income. The SE tax is basically the employer side of her social security and Medicare tax.

[86hertz]

I did a crude calculation like this: before adding her earnings to the system I get a return of A. After adding her earnings (X) I get a return of B. Thus, A minus B equals C (i.e., her tax owed). Thus, her tax rate is C / X * 100 (%). What's wrong with this formula?

[Carl]

Business income is not taxed the same as income reported to you on a W-2. Best you get is a rough estimate, and that rough estimate doesn't include the self-employment taxes at all. Income from different sources is taxed at different rates and are also affected by the total income reported from all sources.

[86hertz]

Would trying the "married / filing separately" in the system give me a number I am looking for?

[Carl]

Nope. For a married couple to file separately will be much more costly tax-wise. You automatically disqualify both of you for quite a number of tax breaks you qualify for by filing a joint return.

[86hertz]

Thank you Carl!