View Full Version : Taxes are KILLIN me this year - help??
If I am paying 33% taxes off my 1099-MISC income after expenses, am I doing something wrong? I have quite a few deductions and it seems like 33% is a little high.
do i need to call a CPA? i don't trust this turbo tax jigger.
grnlude97
03-06-2008, 06:44 PM
If I am paying 33% taxes off my 1099-MISC income after expenses, am I doing something wrong? I have quite a few deductions and it seems like 33% is a little high.
do i need to call a CPA? i don't trust this turbo tax jigger.
Ryan, with your income you need to get a CPA bro. I will tell you if you're single and making over 165k puts you in a 33% tax bracket.
Daniel :)
i am not anywhere near that high - i have other income but just my 1099-MISC shows a total income of 39,980.
grnlude97
03-06-2008, 07:10 PM
i am not anywhere near that high - i have other income but just my 1099-MISC shows a total income of 39,980.
If you're filing single then you would fall in the 25% tax bracket. I really suggest you get an accountant!
Daniel :)
http://elitemrp.net/iat/examples/tarp.jpg
If you're filing single then you would fall in the 25% tax bracket. I really suggest you get an accountant!
Daniel :)
wait...
federal is 28%, and i'd have to pay fica out of that which is 15% - right?
that'd start me at 43% -
89CRXSI
03-06-2008, 09:25 PM
wait...
federal is 28%, and i'd have to pay fica out of that which is 15% - right?
that'd start me at 43% -
dam! thats almost 50% all the gov. wants is money and what do they do fuk up our economy sad...
best of luck with ur taxes tho bro
dam! thats almost 50% all the gov. wants is money and what do they do fuk up our economy sad...
best of luck with ur taxes tho bro... what?
See a CPA, Ryan.
E-DUBB
03-07-2008, 08:52 AM
yeah. i had to pay taxes for the first time this year :(
grnlude97
03-07-2008, 11:42 AM
wait...
federal is 28%, and i'd have to pay fica out of that which is 15% - right?
that'd start me at 43% -
Without going into everything, it doesn't work that way, seriously man get an accountant.
Daniel :)
Flores
03-07-2008, 11:49 AM
I have to agree with everyone telling you to get an accountant.
Don't feel bad, in 2006, thanks to being married, and financing a house and a few other deductions, my effective tax rate was about 20%... which meant I got back about $2k of the 42k I paid out over the year...
It really sucked when the IRS sent me a letter demanding 12k in back taxes over some stock options I exercised in 2006... Thank goodness, I already paid the taxes on those, they just 'lost' the part of my tax return that documented it...
5 minutes on the phone sorted it but, opening that letter last Friday really messed up my weekend.
heyitsryan
03-07-2008, 11:52 AM
I have to agree with everyone telling you to get an accountant.
Don't feel bad, in 2006, thanks to being married, and financing a house and a few other deductions, my effective tax rate was about 20%... which meant I got back about $2k of the 42k I paid out over the year...
It really sucked when the IRS sent me a letter demanding 12k in back taxes over some stock options I exercised in 2006... Thank goodness, I already paid the taxes on those, they just 'lost' the part of my tax return that documented it...
5 minutes on the phone sorted it but, opening that letter last Friday really messed up my weekend.
Wow, that had to be a cheery moment. :(
MoToHeAd125
03-07-2008, 11:53 AM
dam! thats almost 50% all the gov. wants is money and what do they do fuk up our economy sad...
best of luck with ur taxes tho bro
Idiot, the government doesn't fuck up the economy, they help prevent it from fucking up. Recessions and growth periods are natural, and have been that way since the 1920's.
just talked to a CPA and i was actually right on the money, the self employment tax is whats killing me.
i need to roll my real estate license into an S corp to eliminate that tax and it will drop significantly.
oncearunner
03-08-2008, 12:45 PM
Idiot, the government doesn't fuck up the economy, they help prevent it from fucking up. Recessions and growth periods are natural, and have been that way since the 1920's.
um, if you have a healthy booming economy, why would you ever want it to slow down?
its common perception to think that recessions/bubbles are naturals, however they are almost always artificially created. think early 1910s with the bank runs, think 1928, think 1987, think right now.
you are right however, that the govt doenst cause the damage, however, its the federal reserve
memoryleak
03-08-2008, 04:42 PM
1099s suck. You pay a 15% flat rate "self-employment" tax which is nothing more than a cover for social security tax and medicare. You normally only pay 7.5% in a W-2 situation because your employer picks up the over half. Since you are working for yourself, you eat the whole tax.
You should get a CPA to figure out the best strategy for the future. I bet you'll have to pay a penalty too with that much.
i paid quarterly estimated payments all year so i will avoid that penalty
tegteg
03-11-2008, 08:54 AM
i paid quarterly estimated payments all year so i will avoid that penalty
what kind os business you have? you should come by the office and me or teggy can help you out.
koalaznbear
03-11-2008, 11:12 AM
As memory leak stated:
1099s suck. You pay a 15% flat rate "self-employment" tax which is nothing more than a cover for social security tax and medicare. You normally only pay 7.5% in a W-2 situation because your employer picks up the over half. Since you are working for yourself, you eat the whole tax.
As you can see, being self employed won't do much to alleviate the 15% in taxes you have to pay for "fica" (federal insurance contributions act). The good thing is that S-Corp income is taxed only once. Also, an S-Corp provides lower liability for you, which is always a great thing!
The good news is that there's a few strategies to get out of paying social security tax, period, by using an S-Corp structure.
* Rent out your location of business to your business. Let me explain. Let's say you want to lease an office building to conduct business in - you go ahead and get a lease under YOUR PERSONAL name, not your business name. You then proceed to pay the lease from your own money. You then turn around and lease the office space to your business, in which you can even charge a couple $100 more, providing you can justify the price in comparison to other office spaces of similar size.
You'll be saving 15% on every dollar you make from this transaction!
* Rent out equipment to your business. In the same fashion as the above, you can structure your equipment ownership to where your business pays you using some sort of reasonable market rate.
The downside to this transaction structure is that you won't reap the benefits of depreciating the equipment or section 179 expensing. In the end though, the 15% saved on every dollar will outweigh whatever % was saved by depreciating or expensing the equipment.
* Paying yourself through an S-Corp creates a benefit in the long run. While you'll still be paying a total of 15% in fica, for your self and the fiduciary cut, the paychecks you cut to yourself and the business' fiduciary cut are both deductible in calculating the company's taxable income/ net income passed down to the shareholder for the year.
* Also, I'm not too sure how it works, but when you pay yourself through an S-Corp, you can give yourself distributions as well. They have to be about 50/50 % so you avoid raising any red flags for auditing. Unlike paychecks to yourself, distributions will not be taxed by fica. Once again, bypassing the social security tax will give you a 15% savings on every dollar.
Keep in mind, having an S-corp will add responsibilities, such as monthly payroll tax deposits, filling quarterly 941's, yearly 940 , and yearly 1120-s in addition to your 1040. Also, you'll need to be more diligent in accounting for your income and expenses, more specifically making sure to clearly separate personal from corporate.
Finally, I'm giving you the general strategies, not the specifics. A GOOD CPA will know what I'm talking about, but they will also charge upwards of $100 an hour to help you out.
Hope this helped. :idea:
somewhat - but i'm a contractor with a provided office which rules out a lot of those advantages for me.
what kind os business you have? you should come by the office and me or teggy can help you out.
i asked you for a quote for you services and never received a response :Goofy:
took it to my dad's CPA this morning and he was able to reduce my payment from $5300 or so down to $2790 with some creative deductions.
PRAISE JESUS!!
240sxboi
03-12-2008, 03:41 PM
um, if you have a healthy booming economy, why would you ever want it to slow down?
its common perception to think that recessions/bubbles are naturals, however they are almost always artificially created. think early 1910s with the bank runs, think 1928, think 1987, think right now.
you are right however, that the govt doenst cause the damage, however, its the federal reserve
hey genius the federal isn't run by the government, it's not even a government subsidiary it's a privately owned bank.
koalaznbear
03-12-2008, 08:27 PM
took it to my dad's CPA this morning and he was able to reduce my payment from $5300 or so down to $2790 with some creative deductions.
PRAISE JESUS!!
That's good news.
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