• Ask an Expert
• Get a Professional Answer
• 100% Satisfaction Guarantee
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
23669918
Type Your Tax Question Here...
Megan C is online now

# I have income from a form-1099 for about \$55k and capital gains

This answer was rated:
I have income from a form-1099 for about \$55k and capital gains income worth about 300K. I don't have any other income. How must I calculate the approx. tax amount I will owe, both federal and state (DE)? Thanks.

Megan C :

Thanks for requesting me. How are you today?

Megan C :

To calculate your tax, I need to know your filing status - married or single

Customer:

single

Megan C :

Okay let me do some calculations for you

Customer:

thanks...

Megan C :

You're welcome

Megan C :

The capital gains are long term, right?

Customer:

yes, more than a year

Megan C :

Okay great

Megan C :

For federal, I calculate your total tax to be \$65,190

Megan C :

I used the TurboTax Taxcaster, available HERE

Megan C :

Let me check on the state now.

Customer:

I would appreciate it if you can take me through the calculation process for federal..

Megan C :

I used the calculator. It would be extremely complex because you hit the alternative minimum tax

Megan C :

and I'm not good at doing those by hand.

Megan C :

Your effective tax rate is about 18% which you would expect because the bulk of your income is taxed at 15%

Customer:

which income tax bracket would i fall under..?

Megan C :

Your marginal rate is 33%

Customer:

I guess the 1099 is confusing matters for me....because a 1099 income means no tax has been withheld as it is from a consulting gig so what would be my actual income tax, if I removed the capital gains from the picture for a second?

Megan C :

You can't remove the capital gains. That changes your tax bracket.

Megan C :

Wait...I missed that..your tax will be a little bit more because you have self employment tax and I didn't put this in the right line

Megan C :

Add 7,771 to my figure for self employment taxes

Customer:

okay...so are you able to give me the percentage split of taxes for my income from self-employment and my capital gains...?

Megan C :

You figure you pay 15% on \$300,000, about 15% on your self employment just for self employment taxes, and then the rest is tax on your regular business and AMT

Customer:

okay okay

Megan C :

Delaware is \$23,256.48

Megan C :

Do you own your own home, or have medical bills? We could bring this down some

Customer:

if my self-employment income were to be reduced to <\$36,250, does that mean I will have to pay 0% capital gains?

Megan C :

No, that would not be the case. Your capital gains income is factored in when you calculate your marginal rate

Customer:

I am working on a contract job, so potentially could suspend the work temporarily which would take me down to a lower income bracket

Megan C :

so although it's taxed on 15%, the \$300,000 still counts to get you to that 33% tax bracket

Customer:

ok...no, i dont own my home or have medical bills..

Customer:

i was hoping since I did not have an employer and was working contractually, I could push myself into a lower income bracket to avoid the heavy capital gains tax...but I guess that may not be possible.

Megan C :

No, it's not possible, unfortunately, given the level of your capital gains

Megan C :

It's sort of strange that they add that income when figuring your tax bracket, but then don't tax you that marginal rate

Megan C :

Your DE tax is \$23,256 by the way

Customer:

yes

Megan C :

I'm sorry that I couldn't help in that respect

Customer:

okay sure, thanks...are there any steps I can take before Dec 31, 2013 to reduce the capital gains?

Customer:

no worries, I appreciate your help

Customer:

capital gains tax, I mean

Megan C :

Well, you could invest in your business. If you drove your income negative that could help out

Megan C :

but you will spend more money doing that than you will save in taxes

Megan C :

Is there anything else that I could assist you with today?

Customer:

that woudl be all

Customer:

thank you

Megan C :

You're welcome. Before you go, please rate me positive using the rating feature along the bottom of your screen

Customer:

okay, thanks

Megan C :

This gives me credit for assisting you today. 3-5 stars/smileys is positive

Megan C :

You're welcome :-) You have a great day

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16544
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and other Tax Specialists are ready to help you

### JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

### What Customers are Saying:

• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
• I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
• I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
• Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
• Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
• Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
• This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
• Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

• ### Wallstreet Esq.

#### Satisfied Customers:

577
10 years experience
< Last | Next >

### Wallstreet Esq.

#### Satisfied Customers:

577
10 years experience

### Mark D

#### Satisfied Customers:

1245
MBA, EA, Specializing in Business and Individual Tax Returns and Issues

### Richard

#### Satisfied Customers:

3882
29 years of experience as a tax, real estate, and business attorney.

### Robin D.

#### Satisfied Customers:

11072
15years with H & R Block. Divisional leader, Instructor

### Megan C

#### Satisfied Customers:

8621
Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

### jgordosea

#### Satisfied Customers:

2884
I've prepared all types of taxes since 1987.

### R. Klein, EA

#### Satisfied Customers:

1837
Over 20 Years experience