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Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2520
Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
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Hello. I live in tennessee. I have been working as a designer

Resolved Question:

Hello. I live in tennessee. I have been working as a designer for a company for the last few years. this year i will be contracting my services to the company and am trying to figure out how much money to put back for income taxes. i have read anywhere from 15-35%. I will be operating from a home office and am also trying to figure out how much I will be able to write off as business expense.
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

Happy New Year!!

Your tax rate/bracket will depend on the amount of income and your filing status. Also, as an independent contractor, you will need to take into consideration self employment tax (FICA for the self employed). This is on the federal end. There is also state taxes that you will need to consider. SEE BELOW for a link for 2012 federal and state tax bracket information.

FEDERAL:

http://novelinvestor.com/tax-planning/2012-federal-income-tax-brackets-released-by-irs/

TENN. STATE:

Marginal tax rate of 6%

If you would like, based on your filing status and the amount that you expect to earn, if you provide me with that information, I will provide you with the approximate percentage of your income that you will need to set aside for taxes. On a different note, I'm not sure if you mean paying estimated taxes when you write set aside, but if not, you can also make estimated tax payments, which are done quarterly. Doing this prevents you from having to pay a large amount when you file your tax return. do let me know if you need clarification on any of the info that I have provided.

Customer: replied 2 years ago.
I would file as married with 3 dependents. I would like to base this on 40 hour weeks with a net of 18/hr after deducting my taxes. I am trying to decide how much to charge to accomplish this.
Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,

The amount that you are asking for is referred to as the "grossed up" amount. This is different from figuring out what tax bracket you fall under. As I will need to do some calculations, give me a few minutes. I'll get back to you shortly.

Thank you.
Customer: replied 2 years ago.
Thank you. this is my first time using this service. I hope this is how its done.
Expert:  Tax.appeal.168 replied 2 years ago.
You're welcome. So far you are using the site correctly. When we're done interacting, if you feel that I have provided you with a satisfactory answer, you have the option of pressing the accept button. Accepting the answer allows me to receive the credit for the answer provided to you.

On a different note, will you be filing married filing jointly or married filing single?
Customer: replied 2 years ago.
I will be filing married jointly.
Expert:  Tax.appeal.168 replied 2 years ago.
Ok, let me do the calculations, get back with you soon.
Expert:  Tax.appeal.168 replied 2 years ago.
Hello again,

My understanding of what you previously wrote is that you would like to net $18/hr. based on a 40 hr. week, which equates to $720/wkly. $720/wkly equates to $37,440 (52 weeks of pay). Based on the $37,440, you fall into the 25% tax bracket. Based on $37,440, the approximate federal, state and SE taxes total $14,474. Adding the $14,474 + $37,440 equates to $51,914. To accomplish the $18.00/hr. prior to exemption and standard deduction, you will need to charge the client $25.00/hr.
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2520
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 2 other Tax Specialists are ready to help you
Customer: replied 2 years ago.
That is exactly what I came up with ,so thank you. very good information.
Brian
Expert:  Tax.appeal.168 replied 2 years ago.
Brian,

You are very welcome. Thank you for the accept and the bonus.
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2520
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and 2 other Tax Specialists are ready to help you

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