Help me with independent contractor tax question.

Question

I'm an independent contractor with ChaCha as a guide. I've officially made $400 in earnings. How do I figure out what percentage of my earnings goes to federal, state, and Soc sec and medicare taxes?

Answer 1

You'll know when you do your tax return.

All SE income is considered--not just from one job.  However if the total is less than $400, you won't owe SE tax.

All income is considered, so if you have other income, the income tax is based on your tax bracket.

Answer 2

It is 25 percent all together what you would pay to the IRS. They break it down into sections, like med is 7percent, ssi 7percent, and the rest on taxes. If it was simply a paycheck then it would be 12.7 percent. For contractors it is more, because there is no employer matching what you pay in. All of this is what you need to hold out of your check and store away for the end of the year of course. You don't pay it up front. You pay it when you file. So take out the 25 percent of the 400 and put it into a savings account and do this everytime you get money for contract work, it is 25 percent everytime. Then when you file taxes, you figure up the amount and send the money in.