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Death & Taxes - working as a "contractor"

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blue

boob hater
Jan 24, 2004
10,160
2
california
So I was hoping this wouldn't bite me in the ass come tax time, but it has.

I worked as an IC for part of 2009. Bad move. In any case, my net income from the IC gig was under $5000 according to my 1099-MISC. Ran through the H&R Block program, and it's saying I owe over $600 to the gubbermint as a whole (other W2s are all good). A couple of the people I live with made more money than I did for the whole year, and are getting back more than they paid (w/o anymore deductions than I).

Are there any good interwebnets resources to check out for help with this, or does my contractor status leave me royally fvcked? Can't really afford a dedicated tax consultation, especially if I'm gonna end up OWING money.

le sigh.
 
Silver

Silver

find me a tampon
Jul 20, 2002
10,840
1
Orange County, CA
Your net is from that gig was less than $5000, but unlike the W2 income there were no taxes paid on it before it got to you.

You're surprised you owe? You shouldn't be.
 
B

blue

boob hater
Jan 24, 2004
10,160
2
california
Silver said:
Your net is from that gig was less than $5000, but unlike the W2 income there were no taxes paid on it before it got to you.

You're surprised you owe? You shouldn't be.
Click to expand...
I'm aware, but thought with standard deductions, I'd end up not having to owe any money (or next to nothing) as I made so little money last year (even with Medicare/SS taken out).
 
buildyourown

buildyourown

Turbo Monkey
Feb 9, 2004
4,832
0
South Seattle
Remember, under normal employment, you only pay half of the payroll tax. You employer pays the other half.
When you are a contractor, you pay the whole friggen amount. I think it's like 40% just to the fed. Then your state on top of that.

How much can you earn and pay zero tax? I forget. I'd look that up on paper cause H&R can be retards.
 
B

blue

boob hater
Jan 24, 2004
10,160
2
california
buildyourown said:
Remember, under normal employment, you only pay half of the payroll tax. You employer pays the other half.
When you are a contractor, you pay the whole friggen amount. I think it's like 40% just to the fed. Then your state on top of that.

How much can you earn and pay zero tax? I forget. I'd look that up on paper cause H&R can be retards.
Click to expand...
Ugh. Forgot about payroll tax. Awesome.
 
binary visions

binary visions

The voice of reason
Jun 13, 2002
22,102
1,153
NC
:rofl:

Count your blessings. I owe more this year than you made last year. Contracting sucks. I'm glad I was super compulsive about tucking money away for taxes.

All told, what I was making while contracting wasn't worth it. Would have been better to get a lower paying full time job.

Paying both sides of FICA is what kills you.
 
reflux

reflux

Turbo Monkey
Mar 18, 2002
4,617
2
G14 Classified
blue said:
Are there any good interwebnets resources to check out for help with this, or does my contractor status leave me royally fvcked? Can't really afford a dedicated tax consultation, especially if I'm gonna end up OWING money.

le sigh.
Click to expand...
Your best (only?) bet may be to complete a Schedule C (business) form. Your total income on the form will be taken straight from the 1099. The expense side however, is where you can apply any and all work-related expenses incurred during the performance of that 1099 income. In other words, scour your 2009 bank and credit card statements for business-related expenses and the amount you pay in self-employment tax will decrease accordingly.

Good luck.
 
dan-o

dan-o

Turbo Monkey
Jun 30, 2004
6,499
2,805
To quote my accountant whenever taxes are a problem: Looks like you need a new truck!
 
buildyourown

buildyourown

Turbo Monkey
Feb 9, 2004
4,832
0
South Seattle
I learned very quickly when I was working for myself. Never make more than you spend. Otherwise, the gov takes half.
Remember, you can make contributions to an IRA for '09 up until April 14th.
I've had this work well for me. Yeah, you are out more cash in the short term, but you are keeping more of your money in the long term.
 
D

dewme5

Chimp
Mar 6, 2010
7
0
Funny Blue, you started two threads. One bitching about contractors. The other, bitching about your taxes for work as a contractor.
 
MtnBikerChk

MtnBikerChk

Squeaky Wheel
Aug 3, 2001
5,478
38
Southern New England (where there ain't no TITUS d
buildyourown said:
Remember, under normal employment, you only pay half of the payroll tax. You employer pays the other half.
When you are a contractor, you pay the whole friggen amount. I think it's like 40% just to the fed. Then your state on top of that.

How much can you earn and pay zero tax? I forget. I'd look that up on paper cause H&R can be retards.
Click to expand...
It's whatever your tax bracket is plus the FICA 15.3% plus the state. 40% would assume you are in the 25% bracket - which is AGI between $67,900-137,050 for a single individual.

Yeah, schedule C - find expenses.

edited to add: I love tax time questions.
 
B

blue

boob hater
Jan 24, 2004
10,160
2
california
dewme5 said:
Funny Blue, you started two threads. One bitching about contractors. The other, bitching about your taxes for work as a contractor.
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Pleez note that one is from three years ago, and would have been more aptly titled in the vein of "HVAC techs".

Ah, the follies of youth. :weee:
 
buildyourown

buildyourown

Turbo Monkey
Feb 9, 2004
4,832
0
South Seattle
MtnBikerChk said:
It's whatever your tax bracket is plus the FICA 15.3% plus the state. 40% would assume you are in the 25% bracket - which is AGI between $67,900-137,050 for a single individual.
.
Click to expand...

Maybe I'm reading the table wrong. I see 25% - 33,950 - 82,250 for single.
Your numbers are for married filing jointly.
 
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