How much taxes will I have to pay as an independent contractor?

Question

I have a possibility to work as an independant contractor and bill $200,000 per year. How much taxes would I have to pay on this amount? I live in California.

Answer 1

$200,000 less expenses equals your Net Income.  Add any other income you have such as wages or dividends to get your AGI (Adjusted Gross Income).  Subtract your deductions (standard or itemized) and your exemptions to get your Taxable Income.

If you are single and the taxable income is $80,000 you will be in the 28% tax bracket.  So multiply $80,000 by .28 that is your federal income tax.  Multiply $80,000 by .153 that is your self-employment tax.  Not sure what the California income tax rate is or if you have local taxes.  You might also be subject to a state business tax.

Answer 2

you need to deduct your cost from that. so its not possible to give an accurate estimate.

but if after dedcutions you still pay about $20,000 to $50,000 you should be ok.  thats not too much to pay for that kind of revenue.

just remember, you really need to keep track of your deductions to lower your tax.