Question about paycheck and taxes...

[jinduy]

my paychecks are untaxed, so would it be safe to say that I should throw away 30% of my earnings into my savings so that I can pay my taxes each year? are there any special forms i have to fill out? im in CA btw.

 

[mugs]

Yes.

 

[Lifer]

1099, how do you not know this?

 

[jinduy]

i've never paid taxes before as this is my first real job outta college. in my first job 3 years ago, my paycheck was already taxed. i really haven't learned anything about the specifics of the process like this 1099 form. Thanks for the info tho, i will note this .

 

[kranky]

Better check to see if you should be filing quarterly returns.

 

[Rumpltzer]

I've found a lot of estimated tax caluculators using google. A very simple one is on the bottom of this page. It's an estimate of only the 2003 federal tax rate. There are others that'll estimate your state tax if you look around.

 

[EagleKeeper]

Keep track of any expenses that are remotely related to the work. Save those receipts.did up the old tax thread that CPA started this past tax season for ideas.

You will need to plan on %15 for SS tax.
The Federal tax and CA tax will be dependent on how much you make and how much you can write off.

If you can put away %30 up front, do so.

Come Jan, you should receive a 1099 from the employer just like most people get W2s.

Get some tax S/W and have fun.

 

[jinduy]

Originally posted by: EagleKeeper
Keep track of any expenses that are remotely related to the work. Save those receipts.did up the old tax thread that CPA started this past tax season for ideas.

You will need to plan on %15 for SS tax.
The Federal tax and CA tax will be dependent on how much you make and how much you can write off.

If you can put away %30 up front, do so.

Come Jan, you should receive a 1099 from the employer just like most people get W2s.

Get some tax S/W and have fun.

thanks for the info, i can afford to save 30% as i still live with my mom. So instead of receiving a W2, I will receive a 1099 correct? I'm assuming that regular employees don't receive a 1099 correct? Thanks.

so you're saying buying the latest 2005 tax software is worth spending on (ie turbotax)? i will def look into it. i don't want to make any critical mistakes in the real world .

 

[Christoph]

You probably should be making quarterly estimated tax payments. From the instructions for form 1040-ES:

In most cases, you must make estimated tax payments if you
expect to owe at least $1,000 in tax for 2004 (after subtracting
your withholding and credits) and you expect your withholding
and credits to be less than the smaller of:

1. 90% of the tax shown on your 2004 tax return or
2. The tax shown on your 2003 tax return (110% of that
amount if you are not a farmer or fisherman and the adjusted
gross income shown on that return is more than $150,000 or, if
married filing separately for 2004, more than $75,000).

However, if you did not file a 2003 tax return or that return did
not cover 12 months, item 2 above does not apply.

See Form 1040ES and Pub 505
CA probably has a similar quarterly payment system.

This page has more IRS info on self-employment and taxes.

 

[jinduy]

Originally posted by: Christoph
You probably should be making quarterly estimated tax payments. From the instructions for form 1040-ES:

In most cases, you must make estimated tax payments if you
expect to owe at least $1,000 in tax for 2004 (after subtracting
your withholding and credits) and you expect your withholding
and credits to be less than the smaller of:

1. 90% of the tax shown on your 2004 tax return or
2. The tax shown on your 2003 tax return (110% of that
amount if you are not a farmer or fisherman and the adjusted
gross income shown on that return is more than $150,000 or, if
married filing separately for 2004, more than $75,000).

However, if you did not file a 2003 tax return or that return did
not cover 12 months, item 2 above does not apply.

See Form 1040ES and Pub 505
CA probably has a similar quarterly payment system.

This page has more IRS info on self-employment and taxes.

thanks very helpful info, quarterly payments sound like a good idea.