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Started By
Message
Am I figuring taxes correctly?
Posted on 3/10/25 at 12:41 pm
Posted on 3/10/25 at 12:41 pm
Getting into making some 1099 money myself and of course want to keep it all above board. I have a 9-5 that pays me salaried. Wife is in the same situation. We file jointly.
So far may be able to make a few thousand extra a month so nothing truly earth shattering.
On the 1099 money, do I have it right I’ll have to pay income tax, self employment tax, and state income tax?
Our base salaries are around $175k combined. So we are already basically at the social security cap. Do I still need to pay SS on the 1099 income that goes beyond that?
If so that comes out to like damn near 40-50% on the additional income which is infuriating.
So far may be able to make a few thousand extra a month so nothing truly earth shattering.
On the 1099 money, do I have it right I’ll have to pay income tax, self employment tax, and state income tax?
Our base salaries are around $175k combined. So we are already basically at the social security cap. Do I still need to pay SS on the 1099 income that goes beyond that?
If so that comes out to like damn near 40-50% on the additional income which is infuriating.
This post was edited on 3/10/25 at 12:43 pm
3
Posted on 3/10/25 at 12:54 pm to jlovel7
The SS cap is individual not combined.
Posted on 3/10/25 at 1:00 pm to iknowmorethanyou
quote:
The SS cap is individual not combined.
So it’s a $175k cap on the 1099 income as one bucket
Then on the W-2 income as another bucket?
This is contrary to what my account friend just told me.
ETA: I probably didn’t explain to him about including both our incomes. So understand what you mean by individual.
This post was edited on 3/10/25 at 1:57 pm
Posted on 3/10/25 at 1:13 pm to jlovel7
Aren’t you a CPA? This is like intro to corporate tax shite. If you can’t figure this out go be a ditch digger
Posted on 3/10/25 at 1:28 pm to Mingo Was His NameO
quote:
Aren’t you a CPA? This is like intro to corporate tax shite. If you can’t figure this out go be a ditch digger
lol no I am not. I’m not in finance at all.
This post was edited on 3/10/25 at 1:29 pm
Posted on 3/10/25 at 1:48 pm to jlovel7
quote:
So it’s a $175k cap on the 1099 income as one bucket
Then on the W-2 income as another bucket?
NO, it's a yearly cap on earning per person. They are separate buckets until the limit is reached then you stop paying. It's cumulative.
Posted on 3/10/25 at 1:55 pm to jlovel7
quote:
lol no I am not. I’m not in finance at all.
Please disregard, Mingo regrets the error
Posted on 3/10/25 at 2:34 pm to jlovel7
If you are not at the Soc Sec cap through your wages, you'll pay self employment tax on your 1099 income after deduction of 1099 expenses.
The only way around it is to form an SCorp for your sideline business, pay yourself a small salary out of the SCorp and take the rest of the profits as distributions free from SE tax.
They keep talking about making SCorp profits subject to SE tax but they never have and maybe never will.
The only way around it is to form an SCorp for your sideline business, pay yourself a small salary out of the SCorp and take the rest of the profits as distributions free from SE tax.
They keep talking about making SCorp profits subject to SE tax but they never have and maybe never will.
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