I got 1099 form so what percentage do i have to pay taxes is it 30%?

I got 1099 form so what percentage do i have to pay taxes is it 30%?

Postby hobart » Sun Jan 16, 2011 6:31 am

i am a michigan resident i got a 1099 from my employer lets say i made 10000 how much tax will i have to pay and what percent goes to tax i think its 30% any help would be nice
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I got 1099 form so what percentage do i have to pay taxes is it 30%?

Postby weatherly » Sun Jan 16, 2011 6:42 am

Hi,

It is not 30% , it is 15.3% over 92.35% of your net self employment income.

For example : 10,000 x 92.35% = 9,235

9,235 x 15.3% = 1,413 : this is your self employment tax

This SE is your SS and Medicare taxes, you have to use form schedule C-EZ and SE to report .


Good luck!
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I got 1099 form so what percentage do i have to pay taxes is it 30%?

Postby ruff » Sun Jan 16, 2011 6:45 am

Hi,

It is not 30% , it is 15.3% over 92.35% of your net self employment income.

For example : 10,000 x 92.35% = 9,235

9,235 x 15.3% = 1,413 : this is your self employment tax

This SE is your SS and Medicare taxes, you have to use form schedule C-EZ and SE to report .


Good luck!
There're 3 different taxes for you:

1. Self-employment, also known as Social Security + Medicare. This one is a little less than 15% of your entire 1099 (but possibly reduced with business deductions such as supplies and driving). So possibly $1,500.

2. Federal income tax. Impossible to tell you how much. It depends on your family status and other income. Could be as little as zero if you had no other income.

3. Michigan state tax. Again, depending on your other income and family status - could be about $300 or even less if no other income.

As you can see, the biggest hit is SE tax, and it's under 15%. Basically, half of what you feared. Of course, if you had other income, your SE tax will not increase, but both Federal and Michigan income tax could.

Michael Plaks, EA, Houston TX
www.MichaelPlaks.com
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