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re: Am I calculating my taxes right?
Posted on 12/5/15 at 10:58 am to CHiPs25
Posted on 12/5/15 at 10:58 am to CHiPs25
quote:
I picked up a 2nd job delivering pizzas to pay off some debt faster. I'm a 1099 and have Gross Pay of $1000 (for simple math). I have driven 685 miles (57.5 mileage rate) and have paid $134.54 in gas. Vehicle is used for this second job exclusively. Total for mileage rate and gas is $528.42.
Does this mean that i'll be taxed the 15.3% employment tax rate on the remaining $471.58?
Poodle provided good info for you on deductions, but you still need some clarity on the taxes portion of you post.
The 15.3% is self employment tax (Social Security and Medicare Taxes) that would be due and payable on the net profits of your 1099 income. However, the Social Security tax is capped at $118K and the Medicare portion is payable on all income. I mentioned the $118K since you indicated that your have W-2 wages in excess of $100k. But, you will still have income tax liability at your top marginal rate. So the answer to your question is no you will not be taxed at a 15.3% rate. You will be taxed at an approximate 28% income tax rate (approximate due to no knowledge of your Schedule A deductions) and the 15.3% for that portion on 1099 net income that is under $118K (included with your W-2 wages) and the the Medicare 2.9% rate for that portion over the $118K (including your W-2 wages.
ETA: you may also want to familiarize yourself with both State and Federal quarterly withholding requirements.
This post was edited on 12/5/15 at 11:05 am
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