Question for ICs

Posted By: Meghan on 2005-11-30
In Reply to:

How much tax do you pay as an independent contractor? I talked to somebody and they said you should set aside 25% of your income every paycheck (basically self employment tax plus income tax is 25% of your income) - that seems so high! I quit my job as an employee and am going to be an independent contractor for the first time. I do not regret my decision; however, I'm kind of disappointed that so much of my new higher earnings have to go to tax! Is this a correct figure, or an overestimate? Was told that about 15.3% is self employment tax and the other 10% for income tax.

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Question for ICs - Meghan
- use this link - Snow Bunny
- Check into an SEP account!! - Nancy
  - are you saying - Snow Bunny
  - What an excellent idea - thanks! - Meghan
- No, this isn't too high. Maybe too low. We're in the - 33% bracket
  - And, does what you have hubby hold out extra count - Nyer
    - You are right - Patti
  - Oh yes. If you are penalized, you have to pay interest rates sm - x
- I am new to IC. - mtathome
- taxes - Patti
  - So you could end up getting more back at the end of the year - Meghan
    - deduct everything you can think of, electricity, phone, home office if you chose to, supplies, inter - Laura E.
      - Another problem with home office deduction - 33% bracket
        I can use the deduction now, and when old and ready to sell, hope sell price is high enough won't - sm
- about 25-33% for all US citizens as I know it....nm - it's really
- You have to remember that you have no employer sm - T
- Every quarter pay $1,000 to Uncle Sam and $200 to state. nm - Pay dem taxes

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