I turned 65 in November 2011 and stopped working Dec 30, 2011. Social security checks began February 2012 @$2265/mo. I liquidated a simple retirement account, taking $25,000 in cash and leaving $5000 for taxes. I am working part time as an independent contractor at $650/week. I gave two of my daughters $5000 each to move out of my apartment and into their own, and I paid off my youngest daughter's car for $13,000.My income for 2012:25,000 simple retirement account liquidation25,000 social security income14,500 independent contractor (1099) to a total of 64,500Can you give me an estimate of my tax liability for 2012?
Country/State/Province of question: Tx
First attempt to get estimate of tax liability
Welcome and thanks for your question!At your income level, only $19,800 of your social security would be taxable, so I'm calculating this based off of a total taxable income of $59,300. I calculate your total tax bill as $9,942 as follows.Total "taxable income" $59,300Less: 1/2 Self-employment tax (1,024)Adjusted gross income 58,276Less: Personal Exemption (3,800)Less: Standard Deduction (5,950)Taxable Income 48,526Tax Calculated off Tax Tables $8,161Self-employment tax 1,781Total Tax 9,942Less: 5,000 taxes withheld 5,000Owed 4,942Please note that the above calculation assumes that none of your daughters are claimed as your dependents (it sounded like they are older). It also assumes that you have no expenses to deduct against your self-employment (independent contractor) income.
CPA experienced in tax and financial planning
That is exactly what I wanted, a ballpark figure. Didn't want to get caught short! Thank you. Excellent service!
You're welcome. Glad I could be of some help!Since it sounds like you're happy with my service, please accept and give a positive rating.If you need anything in the future, please feel free to ask.DanielleCPA41086.0559751505