Comments on: Self Employment Tax http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/ Tips for living frugal while still having a life Thu, 18 Mar 2010 03:50:29 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Brian http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-37662 Brian Mon, 08 Feb 2010 05:35:22 +0000 http://frugaldad.com/?p=2122#comment-37662 Re: Jay You should definitely contact a CPA to consult and prepare your taxes this year. You have a complicated situation and a certified public accountant could help you. Just Google CPA (your zip code). Re: Jay

You should definitely contact a CPA to consult and prepare your taxes this year. You have a complicated situation and a certified public accountant could help you. Just Google CPA (your zip code).

]]> By: Jay http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-36990 Jay Thu, 28 Jan 2010 07:30:43 +0000 http://frugaldad.com/?p=2122#comment-36990 I'm self-employed but not. I work for a foreign consulate on USA territory, but I am an American citizen. Because of this the consulate pays me but does not take out my taxes, this is something I was responsible for, I never received my pin (even after calling and refilling my info several times), and haven't made a payment the whole of last year. I very frightened about what I owe, and any penalties that are going to accrued on top of that, plus, I live in a state that requires state taxes as well. I don't know how any of this works, and the consulate is absolutely useless, all the Americans in the office say they just come to expect having to pay now...I just need help and I don't know who to contact for direction on filing my taxes this year. I’m self-employed but not. I work for a foreign consulate on USA territory, but I am an American citizen. Because of this the consulate pays me but does not take out my taxes, this is something I was responsible for, I never received my pin (even after calling and refilling my info several times), and haven’t made a payment the whole of last year. I very frightened about what I owe, and any penalties that are going to accrued on top of that, plus, I live in a state that requires state taxes as well. I don’t know how any of this works, and the consulate is absolutely useless, all the Americans in the office say they just come to expect having to pay now…I just need help and I don’t know who to contact for direction on filing my taxes this year.

]]> By: How to Create a Personal Finance Firewall | Frugal Dad http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-33617 How to Create a Personal Finance Firewall | Frugal Dad Wed, 11 Nov 2009 10:02:26 +0000 http://frugaldad.com/?p=2122#comment-33617 [...] with business activities hit my bank firewall account I immediately initiate one transfer to my self employment tax sinking fund for roughly one-third of the gross amount. The remaining amount is transferred to my [...] [...] with business activities hit my bank firewall account I immediately initiate one transfer to my self employment tax sinking fund for roughly one-third of the gross amount. The remaining amount is transferred to my [...]

]]> By: JMGN http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-29160 JMGN Wed, 29 Jul 2009 16:20:47 +0000 http://frugaldad.com/?p=2122#comment-29160 I was layed off end of May and will start working on a contract basis in a few weeks. As I sit here on hold to collect unemployment benefits for the first time in my life, I am wondering what will happen if my contract ends and I have no work. Will the NJ state tax I pay include unemployment insurance? Or do self-employed individuals have no claim to unemployment benefits? I was layed off end of May and will start working on a contract basis in a few weeks. As I sit here on hold to collect unemployment benefits for the first time in my life, I am wondering what will happen if my contract ends and I have no work. Will the NJ state tax I pay include unemployment insurance? Or do self-employed individuals have no claim to unemployment benefits?

]]> By: ladybugz http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-26426 ladybugz Wed, 10 Jun 2009 00:28:45 +0000 http://frugaldad.com/?p=2122#comment-26426 I am an independent contractor for the 1st time, just graduated, I just sent off a payment for the quarterly federal tax due June 15, which was 30% of my net income. What percentage of my net income should I use for California quarterly state tax as self employed? Does anyone know? Thank you for your assistance. I am an independent contractor for the 1st time, just graduated, I just sent off a payment for the quarterly federal tax due June 15, which was 30% of my net income. What percentage of my net income should I use for California quarterly state tax as self employed? Does anyone know? Thank you for your assistance.

]]> By: * Self-Employment, Estimated Tax, and Safe Harbor http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-25946 * Self-Employment, Estimated Tax, and Safe Harbor Fri, 05 Jun 2009 00:46:11 +0000 http://frugaldad.com/?p=2122#comment-25946 [...] Self-employment tax is basically the Social Security and Medicare portion of your taxes.  When you work for someone else, these taxes are withheld on your behalf.  However, as a self-employed person, you’ll have to pay these taxes in addition to income tax. The self-employment tax rate is 15.3%, which consists of two parts: 12.4% for Social Security and 2.9% for Medicare.What Is Estimated Tax? [...] [...] Self-employment tax is basically the Social Security and Medicare portion of your taxes.  When you work for someone else, these taxes are withheld on your behalf.  However, as a self-employed person, you’ll have to pay these taxes in addition to income tax. The self-employment tax rate is 15.3%, which consists of two parts: 12.4% for Social Security and 2.9% for Medicare.What Is Estimated Tax? [...]

]]> By: -> Don’t Forget To Make Your Estimated Tax Payment For Self Employment Income! | Bible Money Matters http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-22879 -> Don’t Forget To Make Your Estimated Tax Payment For Self Employment Income! | Bible Money Matters Tue, 14 Apr 2009 23:10:36 +0000 http://frugaldad.com/?p=2122#comment-22879 [...] also need to pay your state estimated taxes (if your state has income tax) in addition to the self-employment tax of 15.3% (the social security and medicare portion of your tax).    It can be easy to [...] [...] also need to pay your state estimated taxes (if your state has income tax) in addition to the self-employment tax of 15.3% (the social security and medicare portion of your tax).    It can be easy to [...]

]]> By: Bible Money Matters http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-22870 Bible Money Matters Tue, 14 Apr 2009 20:19:39 +0000 http://frugaldad.com/?p=2122#comment-22870 I just finished my first estimated tax payment, and man, that sucks. It's like 15% for federal taxes, 15.3% for self employment tax and then another 7.05% for my state tax. It's enough to make me wonder if it's all worth it! I wish they would just allow me to keep some of my own money! :) I just finished my first estimated tax payment, and man, that sucks. It’s like 15% for federal taxes, 15.3% for self employment tax and then another 7.05% for my state tax. It’s enough to make me wonder if it’s all worth it! I wish they would just allow me to keep some of my own money! :)

]]> By: frugal grandma http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-22787 frugal grandma Mon, 13 Apr 2009 17:13:10 +0000 http://frugaldad.com/?p=2122#comment-22787 I have been paying self-employment taxes for over 18 years now. Although I have been a low-income earner I have ben paying them at the same rate as someone with a good job, as self-employment taxes do not distinguish between the poor & the rich. In 2008 I had a really bad year. At first I was happy to learn that I was not even required to file a return, as my income was too low; then I saw that because I was self employed, actually I still owed taxes. Even someone who only made $400 the whole year is required to pay self-employment taxes, whereas if I had been working for someone else I could have made up to $8,850 and not owed anything, including Social Security’s cut. Does that seem fair to you? I have been paying self-employment taxes for over 18 years now. Although I have been a low-income earner I have ben paying them at the same rate as someone with a good job, as self-employment taxes do not distinguish between the poor & the rich.
In 2008 I had a really bad year. At first I was happy to learn that I was not even required to file a return, as my income was too low; then I saw that because I was self employed, actually I still owed taxes. Even someone who only made $400 the whole year is required to pay self-employment taxes, whereas if I had been working for someone else I could have made up to $8,850 and not owed anything, including Social Security’s cut.
Does that seem fair to you?

]]> By: LinderLou http://frugaldad.com/2009/03/30/self-employment-tax-lessons-learned/comment-page-1/#comment-22238 LinderLou Sun, 05 Apr 2009 23:48:16 +0000 http://frugaldad.com/?p=2122#comment-22238 30% seems pretty high to me. I've been self-employed for at least seven years now, and learned the hard way about self employment taxes. In most situations, you "pay" 15.3 percent for SS and Medicare, but you get half of that credited back to reach your adjusted gross income on your 1040 (I'm also a tax preparer). That leaves federal and state income tax. Unless you want a large refund - and you shouldn't because it gives the Feds an interest-free loan on your money - don't overwithhold. And don't forget that the govt. just changed everyone's withholding requirements so you get to keep a little more. 30% seems pretty high to me. I’ve been self-employed for at least seven years now, and learned the hard way about self employment taxes. In most situations, you “pay” 15.3 percent for SS and Medicare, but you get half of that credited back to reach your adjusted gross income on your 1040 (I’m also a tax preparer). That leaves federal and state income tax. Unless you want a large refund – and you shouldn’t because it gives the Feds an interest-free loan on your money – don’t overwithhold. And don’t forget that the govt. just changed everyone’s withholding requirements so you get to keep a little more.

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