|
|
| *The Commerce Journal>>>Other Taxes |
I have 2 jobs, they are both considered full time, my primary employment being with a large company? |
And my second job I am self employed. I usually come pretty close to 40 or more hours a week on my second job. What I am not sure about is I want to hold back enough Federal & State taxes so that I don't end up paying at the end of the year, but I don't want a large refund either. I am one who likes to have their money weekly. None of that refund stuff for me. I want my money now. My employer deducts Fed, state, local, medicare & social security so will I have to do that with my SE taxes as well or will I be pretty much covered? And I find many calculators but none where I can use both employer taxes and SE taxes? Any suggestions? Anyone know of any loopholes I can look into. I have 3 children and I take care of a disabled aunt as well. www.paycheckcity.com is a good paycheck calculator website. Social security tax stops once W-2 wages & self-employment income hit $97,500 for 2007. Your employer won't know about your self-employment income, so if you thought you would hit that amount between the two jobs you need to adjust your own self-employment income. Your employer will only deduct taxes for what he is paying you, and will not take into account the self-employed income you make on the side. You will have to take that into account. As far as calculating the SE taxes, I would use the www.paycheckcity.com website calculator, and figure out how much the federal, social security, medicare and state taxes would be and pay the federal, social security, and medicare taxes to the IRS (remember though you will needing to double the social security and medicare taxes since you will be both employer and employee) and the state tax to the state. It may not be perfect but probably will be better than what you are doing right now. Source(s): www.paycheckcity.com There are several issues here. First you can control the amount of income tax deductions by providing each employer with an appropriate W4 form. You have to make some estimates of what your tax will be, then fill out the forms so that the two employers deduct amounts that will add up to your estimate. For example, you could claim two dependents with one employer and 2 with the other. There is also a place on the form where you can claim additional exemptions. If you can manage your money well, there is a strategy you can use that can save you money. You claim a lot of exemptions and have employers withhold a small amount for income taxes. You create a reserve in a savings account using the tax not withheld. Around November, you estimate how much tax you will owe, and since the withholdings are too small, you file a new W4 and have one of the employers withhold a very large amount in December, possibly your entire paycheck. There is a place on the form where you can specify the amount. This avoids the underpayment penalty. The IRS assumes that any amounts withheld are withheld evenly throughout the year. You earned interest on your savings and now use them to make up for the reduced income in December. I used this strategy to claim 19 dependents throughout the year, then had large amounts deducted from my pay in November and December. In December you have to file a new W4 form again for next year to cancel the one with the huge deduction. As for medicare and Social Security taxes, you have no control. Each employer must withhold the required percentage and match it. This could mean that the total amount withheld exceeds the limit to which you are entitled. When you file your tax return, you claim a refund for the excess SS tax withheld. The excess paid by the employers' contributions stays with the government. If I were you, I'd get last years tax form and fill it out as to what you expect to earn throughout the year to determine an estimate of your annual tax liability. You can then adjust your quarterly estimated tax payments accordingly. Your employer isn't going to pay the taxes on your self-employment income, you will have to. If you don't want to bother with quarterly payments, you can have your employer withhold enough extra from your paychecks to cover your taxes on your self-employment income also - you'd do that on your W-4. You will definitely owe medicare taxes (both employer and employee halves) on your second job. Depending on your income from your first job, you might or might not also owe the two halves of social security - ss payments are capped, so if you earn over around $94,200 (this was 2006 limit - it's a little higher for 2007) on your first job you won't pay ss on your second job - otherwise you'll pay ss until you reach the limit. You can download form 1040 schedule SE at irs.gov to figure out how much you'll owe - it's the 2006 version so won't be exact, but will be pretty close. And yes, you will also owe income taxes on your se income, and you should figure the rate as starting where your first job leaves off. You won't be even close to covered by the withholding from your first job unless you have a lot extra withheld. Your choice is have a lot (probably about double or more, if your se income is close to what your job income is) withheld at your main job, or make quarterly estimated payments. If you just wait until you file, you are likely to have a huge tax bill, along with penalties for under-withholding. There would be so much more info needed for anyone to estimate amounts that it's impossible to do from the info you give. But if your income from the side job is anything significant, and if you are putting in 40 hours a week I sure hope it is, there will be quite a bit of tax due on it. If you'll post again including the gross from each of the two jobs, the amount of income tax currently withheld from your main job, whether you are married and whether you itemize deductions, and whether or not you can claim the disabled aunt as a dependent (or more details about what "taking care of" her means), someone can give you an estimate of what you will pay. Or email me with that info and I'll give it a shot. On your second job, will need not just your gross, but info on any associated expenses for earning that money, since those might be deductible. Also, if you are married and your spouse has income, include that in your list of info also. Let me try and make this simple for your. With some simple calculation you should be able to determine what your total tax liability will be adding your SE and W-2 incomes. Do a fake tax return if necessary to do that. Now go to your employer and increase you withholding so you come within a few bucks of that amount. If you can not do that go find a local tax professional and commit to having him do your taxes this coming year and ask him to figure this out for you. We do that for people all of the time. Some of them even come back the following year. Compute your estimated tax for all your income including self-employment tax (social security for self employed persons, a double hit) on Form 1040-ES then tweak your W-4 with your wage job so that enough is taken out there to take care of your self employment income. For the purpose of computing the penalty for not making enough in estimated tax payments, withholding is spread out over the year even if it is lumped at the end. |
| Tags |
| Boston Austin Atlanta Other - Business & Finance Other Taxes United States Taxes United Kingdom Taxes Spain Taxes Singapore Taxes Mexico Taxes Ireland Taxes |
| Related information |
Use it for a business. Otherwise if you're just using it for driving back and forth to work (i.e. commuting), you can't. The only other way would be to donate it to a non-profit orga... Nope, they pay taxes just like the rest of us. The only thing that is different is that state and federal employees don't contribute to social security (they have their own retirement sy... Sorry, but no refund. What taxes were you looking for a refund for?... you'd send the pages that have info on them along with the rest of your 1040 return. No need to send along pages with nothing on them other than your name and social security number.... The withholding may well be higher than other forms of payment but the tax on that money at the end of the year is the same.... The lira (plural lire) was the currency of Italy between 1861 and 2002. Between 1999 and 2002, the Italian lira was officially a 鈥渘ational subunit鈥?of the euro. However, physical payments co... On $600 a week your takehome would be $450.87 if you claim 1 allowance, $439 wit 0 and $462.72 with 2 allowances. All of these assume that you are taking withholding for NYC tax.... p2 = p1(1 + t) where p2 is the price plus vat and p1 is without vat for example, is the price of an item was 拢10 and the VAT on it was 17.5% p2 = 10(1+17.5%) p2 = 10(1 + 17.5/100) ... |
Commerce Categories--Copyright/IP Policy--Contact Webmaster |