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How much should I set aside for 1099 form.?

Asked by: sventre 1137 views YA Discussion

I am receiving checks for night sitting and the lady told me she will send me a 1099 form. I am getting paid $ 100/night and am wondering how much I should set aside to be set for the taxes I need to pay on this reported money. How much money do i need to set aside? What percentage of self employment, federal income, and state income tax will be deducted? And is there any other hidden fees I need to pay for this?

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  1. Bobbie on May 08, 2012 Reply

    And is this being done in the lady home as a house hold employee NANNY and perhaps this lady should be paying you as an employer would and be withholding the required FICA taxes and federal and state income taxes also for this job that you are doing at this time of your life.
    You must withhold the employee’s share of social security and Medicare taxes unless you choose to pay both the employee’s share and the employer’s share. The taxes are 13.3% of cash wages. Your share is 7.65% and the employee’s share is 5.65%.
    The employer may also be responsible for paying federal unemployment tax. Federal unemployment tax is not withheld from your employee’s wages. You are not required to withhold income tax from your employee’s wages. However, you and your employee may agree for you to withhold income tax from their wages.
    If social security and Medicare taxes or federal unemployment taxes must be paid, or if you withhold income tax, you will need to file Schedule H (Form 1040) (PDF), Household Employment Taxes. You may also need to file a Form W-2, Wage and Tax Statement and furnish a copy of the form to your employee.
    Use the search box at the http://www.irs.gov website for the below referenced items.

    Publication 926, Household Employer’s Tax Guide
    Schedule H (Form 1040) (PDF), Household Employment Taxes
    Tax Topic 756, Employment Taxes for Household Employees


    NOW if you choose to be a self employed taxpayer independent contractor for these services that you are performing for 100 a night then you will have to use the schedule C and the SE of the 1040 income tax return for this purpose and then pay all of your social security and medicare taxes plus the FIT at your marginal tax rate for the tax year.
    100 a night for how many nights during the tax year.
    100 X 5 nights = 500 for the week.

    Here you go you can try and do your own estimated tax calculations at this time in your life for this purpose since you are the only one that would know all of the needed necessary information at this time.
    http://www.irs.gov website and use the search box for 2012 Form 1040-ES (OTC)
    Estimated Tax for Individuals


    Copy and paste the below enclosed website address into your browser address bar for this purpose.


    Enter your filing status, income, deductions and credits and we will estimate your total taxes for 2012. Based on your projected withholdings for the year, we can also estimate your tax refund or amount you may owe the IRS next April 2012.
    In 2011, Federal income tax rates were scheduled to increase to pre-2001 levels, but the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010″ left the existing tax brackets in place through 2012.
    You probably can find an estimated tax calculator for your state income taxes by going to your state income tax department website and use the search box for estimated tax calculator at that time in your life.
    I would hope that you do find the above enclosed information useful for your situation and good luck to you with this matter. 05/08/2012

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  2. tro on May 08, 2012 Reply

    for one thing, if you are doing this in her home and she will eventually pay you $ 1700 or more, she should be paying you as a household employee, withholding at least FICA from your checks, issue you a W-2 at the end of the year etc
    as a self employed person your self employment tax is approx 13.3% of your Sch C ‘net’ amount, you need to prepay what you anticipate your tax to be on forms 1040ES each quarter

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