freelancer taxes
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- danoob
question - how much do you guys normally set aside from "the check" for taxes?
- ********0
$119k and under is 33%
$120k+ 45%
- tkmeister0
the numer sepill gave you are referring to Adjusted Gross Income. so you need to figure out the deductions, expenses, etc to have a correct taxable income.
also, remember you need to pay city, state taxes. so it's best to set aside 40-50%
- ********0
50% is for people who bank the 120k+
40% and under is a very safe amount.
make sure you get a receipt for everything and ATM visits under $500 are totally write-off-able.
- barbtastic0
wtf are you frsrs about the ATM write-off?
- ********0
hell yeh ATMs
[looks up in dictionary: frsrs......nothing dammit!!]
- barbtastic0
frsrs=for serious
i made it up. the only reference would be in my little blonde head.
- tkmeister0
damn, eddie, where did you get those numbers?
regardless, save 40% and put that into CD or saving with 5% interest, if you aren't filing quarterly estimate tax.
- barbtastic0
i would set aside at least 40%... but it does depend on what you make.
or do what i do and get an accountant and make him do it.
- ********0
oh then yes...speak to your accountant about it.
pretty much anything under $500 is a pure write off...cept food and weed.
- ********0
tk...whats wrong with my numbers?
you still saying 40% and most people are in the 40% range.
plus im drunk and stoned
:)
- barbtastic0
yeah but that's 500/employer, not per job.
- barbtastic0
basically, all i'm saying is that i don't get out of bed for less than $500 a day.
- ********0
basically, all i'm saying is
that i dont smoke a joint for less than $500 a gram.
- barbtastic0
if that's what you are paying a g, i MOS DEF want some!!
- ********0
she said she wants my junk!!!!!!!!!!!
:)
- tkmeister0
$500/day is about $100,000/yr, that's if you work consistently.
put 15% into SEP, 4k into rothIRA, 6-8k for health insurance, home office, biz expenses, blah blah, your taxable income is probably around 60k. let's say 25% of it is going to taxes. your cash take is 45k.
now, that's an ideal scenario.
- ********0
...and TK passes down the 11th Commandment!!!!
:)
- barbtastic0
um. i wasn't askin. but thanks for pointing out my salary.
- barbtastic0
us girls being real dumb at math and all...
- tkmeister0
well, a lot of freelance people don't do rothIRA or SEP but those are the best way to save money. and many freelancers don't work consistently. so they really screw up the number and then forget about all the small numbers add up.
so if you don't put SEP or IRA, then your income is about 20k higher. that'll not only push the taxable income to 28% tax rate but also end up paying more to the government and not to yourself.
many don't think about this.