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Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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if i make 60,000 on a 1099 how much will owe the irs

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If you receive a 1099 for services performed then you are considered an independent contractor and required to file form Schedule C as a sole proprietor. As a sole proprietor in addition to income tax you will also have to pay self-employment SE (social security) tax. The SE tax on $60,000 will be approximately $8,478 (you do receive an adjustment for 50% of this on your 1040). Your income tax if you file as a single individual and do not itemize will be approximately $8,177. So your total federal income tax will be approximately $16,655 ($8,478 + $8,177).

http://www.irs.gov/businesses/small/article/0,,id=98846,00.html

 

Customer: replied 9 years ago.
(you do receive an adjustment for 50% of this on your 1040). what does this mean

That means that 50% of your SE tax ($8,478 x .50 = $4,239) is entered as an adjustment to income on line 27 of Form 1040 which in turn reduces your adjusted gross income of $60,000 to $55,761 resulting in a reduction of income tax.

http://www.irs.gov/pub/irs-pdf/f1040.pdf

 

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