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2,100 dollar tax bill

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posted on Apr, 15 2014 @ 12:37 AM
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So last year I was 1099'd at my job to the tune of 17,430 dollars. I just had to use Turbo Tax to file my taxes and find out I owe 2,100 dollars between state and federal taxes. How is this even possible? I don't have the 2,100 dollars to pay this so I am gonna try to get on their installment plan, which is now going to be yet another monthly burden I have to pay for...




posted on Apr, 15 2014 @ 12:45 AM
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reply to post by Ketzer22
 


Self employment tax is difficult. Did you take all the deductions you could?



posted on Apr, 15 2014 @ 12:53 AM
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Ketzer22
So last year I was 1099'd at my job to the tune of 17,430 dollars. I just had to use Turbo Tax to file my taxes and find out I owe 2,100 dollars between state and federal taxes. How is this even possible? I don't have the 2,100 dollars to pay this so I am gonna try to get on their installment plan, which is now going to be yet another monthly burden I have to pay for...


Can you defer income to next year? Do you have a home business, are there any additional write-offs you can take? Did you incorporate costs for doing your taxes (if you can)?

Cheers - Dave



posted on Apr, 15 2014 @ 12:55 AM
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as far as i could tell.. i was a sub contractor not a small business so i didn't really see many i could qualify for.. I guess it's my own fault for just using turbo tax and not having them done professionally... i'm just so mad that they are gonna charge me that much money- at 17,430 a year i'll be lucky to make 2 grand in a month



posted on Apr, 15 2014 @ 12:57 AM
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Dave- I don't know how to defer taxes, this is the first year i've ever owed (i'm 25). But this is also the first time i've ever been 1099'd.



posted on Apr, 15 2014 @ 02:48 AM
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They didn't tell you they were paying you via 1099?

Yes self employment is fun. I owed $7800 to the irs last year. But even worse than the feds, is NY state. Owed those a holes $13200. Because they have no deductions or credits like the federal gov does. And if you dont pay they will take fingers. No joke. I never understood why everyone hates the IRS so much, some states and their income taxes are worse!

My advice is to set aside 25% of your monthly into savings account for taxes when you owe. And then you can pay taxes beginning of next year and accrue interests too, yay



posted on Apr, 15 2014 @ 03:54 AM
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reply to post by Ketzer22
 


If need be, file for an extension and definitely go through any deductions with a fine toothed comb. Use caution though and make sure that you account for those things that you actually can evidence--just in case.

Here's the list of itemized deductions that you can look over to make sure that there isn't something that you may have missed:
www.irs.gov...

And also read through these two as well:
www.irs.gov...&-Self-Employed/Self-Employment-Tax-Social-Security-and-Medicare-Taxes
turbotax.intuit.com...

Another thing to look at is whether or not you are legally an independent contractor or not. A lot of companies have taken to the practice of making employees independent contractors to evade employment taxes and it's not always legal. If you were hired on for a specific job and completed it without your employers control, then you'd probably fall under independent contractor. However, if they maintained control over the work you did and more, you might get re-ruled as an employee--far better for your taxes.

www.irs.gov...&-Self-Employed/Independent-Contractor-Defined
A more simple explanation of the above:
tentiltwo.com...

If you look like you were an employee, think about filing a IRS Form SS-8 to get your status reviewed. What they'll do then is re-assess the employer portion of the taxes and that'll reduce down your tax bill.

Hope this helps somehow. I'm an accountant and it doesn't make sense to me that, if you only made that $17k a year, that that would be your total tax bill. So go through everything again, make sure nothing got missed by Turbo Tax which can get buggy with SE taxes apparently. And file that extension!


PS. I'm an accountant albeit rusty on tax because, well, I hate tax, too.

edit on 15/4/14 by WhiteAlice because: added ps



posted on Apr, 15 2014 @ 10:08 AM
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Im 1099, and had to file the self employment tax as well. The guy at H&R told me not to take the installments, since they charge a fee. He said pay it down soon enough and the interest will be negligible.
At any rate I had savings, since this isn't my first 1099 job.

Live and learn man.



posted on Apr, 15 2014 @ 10:28 AM
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reply to post by Ketzer22
 


So you owe $2100 on $17000+

So your combined effective tax rate is like 14%. Grab the gunz!

Just so you know, people reading your post have tax rates much higher than that.

I empathize with your attempts to make a comfortable living but the problem would have been more manageable had you done reasonable withholding as you were paid. I don't mean to lecture. I've jacked up myself on withholding a couple of years and had to borrow money to pay the bill. So I've been there.



posted on Apr, 15 2014 @ 11:14 AM
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Umm that's not a bad tax rate. I owe 17k Federally and nearly 5k to California... Thats with massive deductions.



posted on Apr, 15 2014 @ 11:20 AM
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reply to post by robbystarbuck
 


I'd like to have your income if you owe that much in taxes.



posted on Apr, 15 2014 @ 11:25 AM
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reply to post by ScientiaFortisDefendit
 


Here's a screenshot from this years voucher that got sent with the payment (while not showing my personal info)


That is a damn tax bill right there! I hate tax season



posted on Apr, 15 2014 @ 11:58 AM
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reply to post by robbystarbuck
 


When is the tax revolt coming, I wonder.



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