Tax help Please!!!?

Question

OK I have a job that pays me cash on a bi weekly basis. I want to prevent getting in trouble with the IRS so I am trying to figure out how much out of every paycheck i should withhold to be able to pay my taxes at the end of the year. I make $8.75 an hour and 40 hours a week. Can someone please help me

Answer 1

If you are the only one in the house having your withholding as 1 is the best way to avoid getting in trouble with the IRS. If you ever get audited they will be looking at how much you earn vs your withholding.

Answer 2

If you send the IRS $600 every quarter, then that should cover your federal income taxes and self-employment taxes.  

$8.75 x 40 hours x 52 weeks = $18,200 less $5,450, less $3,400 = $9,350 taxable income.  10% income tax = $935.  15.3% Self-employment tax = $1,431.

You will have to figure out what - if anything - you need to send the state.  In Michigan it would be about $165 per quarter.

You should get the estimated tax instructions from www.irs. gov

Answer 3

You are now self employed so the question has more to it than you think.  As a self employed person, you have to pay not only income tax and the employee's half of social security and medicare tax, you have to pay the employer's half of those taxes also.

So figure on 15.3% for social security and medicare.  The income tax part depends on what tax bracket you will be in which depends on your income from this job and all other sources.  Since I have no other info, I would guess 10-15% more for that.

The bad news is that the government doesn't want to wait until next April for money you may have earned as much as 16 months earlier.  You need to pay them a quarter of your estimated tax liability every quarter.  You should download Form 1040-ES from www.irs.gov as a starting point for learning about estimated payments.  If you do not, you will be subject to an underwithholding penalty when you do file your taxes next year.

And don't forget your state.  They want their estimated tax payments quarterly too.

Answer 4

standard 1 person is just fine

Answer 5

Figure around $140 per biweekly paycheck for the feds, plus something for your state if you have a state income tax.

And you need to make quarterly payments, not just wait until then end of the year when you file your tax return.