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| Tax question regarding 1099 form Posted by RollTide MJ In 2012 I did a side job programming some lighting controls. We charged the contractor a $4,000.00 flat fee. In return he sent me a 1099 form. I'm going to be taking mine and my wife's taxes this week to get done. My question is this: This is the first time I have ever had to do a 1099 form so I'm wondering how much I'm looking at having to pay off of the $4,000.00.  on 2/13 at 3:01 pmReply • Back to Top |
| What is your marginal income tax rate? If it is 25% multiply $4,000 time .25 which equals $1,000. Also, do you live in a state with state income tax? Then throw in a little more. Did you have any expenses with the side job you could use to offset some of the income? Reply • Back to Top |
| I believe it's 13.3% + whatever your tax bracket is. So if it's 25%, you should owe $1,532 in federal, plus any state taxes. Reply • Back to Top |
quote:  Reply • Back to Top |
| You'll also have to pay self employment tax on it as well to cover the payroll taxes. I second the suggestion to try to find records of any expenses you had for that job to offset the amount you were paid. Reply • Back to Top |
quote: 6.2% x2 for SS 1.45 x2 for medicare normally 15.3%, but, thanks to the payroll tax holiday you get a discount tax of only 13.3% ..... now add in your tax bracket rate..... Reply • Back to Top |
| You didn't net $4,000. I repeat, you didn't net $4,000. There were expenses, find them all! Reply • Back to Top |
| find some expenses Reply • Back to Top |
quote:If he claims zero expenses with respect to the consulting income then he will have to pay $491 of self-employment tax, and $930 of income tax with respect to the $4,000 of income. The self-employment tax is 13.3% of $4,000 multiplied by 92.35%. And the income tax is 25% of $4,000 less $282 (57.51% of the $491 of self-employment tax). So his federal tax burden with respect to the consulting income is $1,421 if he is in the 25% tax bracket. Reply • Back to Top |
quote: Yep. Cell phone, internet connection, home office, etc.. I have made it to where I have lost money on a 1099 This post was edited on 2/14 at 2:26 pm Reply • Back to Top • Refresh |
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