Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
12-07-2017 12:02 PM
I'm hoping someone can help me figure this out being a first time 1099 (contractor) employee. I am single, 35, and live in Mineola, NY (Nassau County - Long Island, NY).
From January 2017 until mid-October 2017 I was paid as a regular W2 taxable employee. Then from mid-October 2017 until mid-December 2017, I switched to 1099 (contractor) worker status with the same company so my checks during this period are paid gross (no taxes taken out).
The gross pay for mid-October 2017 until mid-December 2017 should total around $7000, which as far as I understand it, means I have to make estimated tax payments to the government and NY state due 1/15/18. Being a novice, I searched online and came up with the following calculations:
SS/Medicare = $7000 * 0.9235 = $6,464.50 taxable portion. $6,464.50 * 0.153 = $989.07 taxes due
Federal withholding = $7000 * .10 (10% tax bracket) = $700
Federal Total Due = $1,689.07
NY withholding = $7000 * .04 (4% tax bracket) = $280
NY Total Due = $280
Does this seem about right? I don't need to have the exact dollar and don't mind overpaying a bit because the balance can then be applied when I do my regular 2017 income taxes. Right now I'm only concerned about prepaying taxes on the $7000 gross 1099 money I've received and will do my regular 2017 income taxes in March 2018. But am I able to make the calculations like this in the vacuum of the $7000 gross? Or do I need to make the calculations while also factoring in my W2 wages (which will change the tax brackets)?
Thank you for your help!
Solved! Go to Solution.
12-07-2017 01:49 PM
Welcome to the H&R Block community.
Your calculations aren't bad, but they're a little bit off.
You have to account for all of your income as well as your deductions & exemptions that you generally receive every year or know that you'll be eligible for when figuring your tax brackets. Your tax bracket is based on your taxable income. Taxable income is the figure you come to on a tax return before applying tax credits.
I will figure everything for you if you can provide me with your total income for the year and tell me whether or not you have a spouse and/or any dependents.
Also note that if you did not owe any tax with your tax return last year (tax year 2016) then you will qualify for the exemption from the requirement to make estimated payments for this year (2017).
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)