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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I've just incorporated and am providing travel medical work

Customer Question

Customer: I've just incorporated and am providing travel medical work to various hospitals. Trying to figure out how much to withhold per paycheck to pay my quarterly taxes.
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Submitted: 10 months ago.
Category: Tax
Customer: replied 10 months ago.
I will be working as a 1099 independent contractor under a sole proprietorship LLC. I am paid about 6,566.70 every 2 weeks. How much should I save from each paycheck for taxes/SS/medicare/etc? Additionally, when I incorporated I bought a truck in order to travel to my assignment and put all my property in storage, I am living in a hotel and do not own a home, I am using my mothers address as my permanent address for tax purposes in GA and am working in oklahoma, I am single, no dependents. Am I able to deduct the cost of the truck which was about 36k? and the cost of storage? and my meals while on assignment?
Customer: replied 10 months ago.
my cell phone? If I buy a computer for my work is that tax deductible? Additionally, I will be changing over to a paid W-2 FTE in april, does this affect my ability to deduct purchases for my business or the amount of withholding I should take out?
Expert:  Lev replied 10 months ago.

I've just incorporated and am providing travel medical work to various hospitals.
Incorporated - means creating a corporation.
The corporation si a separate legal and taxing entity and files its own tax return.
Please verify if your statement is correct.
Trying to figure out how much to withhold per paycheck to pay my quarterly taxes.

I assume that you are asking about YOUR estimate payments - correct?
Or you meant estimate payments made by the corporation.

Please clarify.

Customer: replied 10 months ago.
I'll be paying myself from my LLC bank accounts. I think the LLC as a sole proprietor in georgia is counted as a non-entity?Trying to figure out what my taxes would be per paycheck? Do I have to pay personal and LLC taxes?
Expert:  Lev replied 10 months ago.

If you have a single member LLC and have not specifically elected it to be treated as a corporation - it would be non incorporated entity.

So for income tax purposes - that is disregarded entity - means - it is ignored as there were no any LLC.

For other purposes - including liability - that is a separated legal entity.

So - you personally will be liable for any profit realized by the LLC regardless if there is a separate bank account and regardless how the money are used.

.

You will report business income and expenses on your personal tax return - and net income will be subject to both - self-employment and federal income taxes plus state tax liability (depending on your state).

Expert:  Lev replied 10 months ago.

So to estimate your expected tax liability - we need to know your NET business income (after all deduction.
That amount of net business income is subject to both - income tax and self-employment tax.
Self-employment taxes are 15.3% for most self-employed persons.
Income taxes are based on TOTAL income, filing status, deductions, etc. As a rough estimation - we may use 15% of your net business income.
So without any other details - I would say - to keep at least 30% of your net business income to cover possible tax liability.
If you are looking for quarterly estimate taxes - divide that amount in four equal parts - and that would be your payments.
To make more detailed estimations - we would need to use your expected income, deductions - business deductions and separately - personal deductions, and estimate your expected tax liability.
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