YANMTA. You are not my tax accountant.
March 7, 2014 3:41 PM   Subscribe

Am I saving enough for taxes from my second job? I live in the US and have no state income taxes. My main job is W2. I make around $56k and usually end up close to even on my Fed return. I now have a second job that's 1099. I get paid $150 a week and set aside $50. Is this probably enough for Fed (income/SS) taxes?
posted by 1066 to Work & Money (5 answers total) 1 user marked this as a favorite
Have you already used the IRS withholding calculator?
posted by jdroth at 3:53 PM on March 7, 2014 [1 favorite]

I am in a similar position--US, no state income taxes, small amount of side 1099 income. I make more than you though I don't know if it puts me in a different bracket and I set aside 1/3 of the amount I get as well and so far it has been more than adequate come tax time (letting me put some of that money back into my budget), so I think you'll be okay.
posted by foxfirefey at 3:54 PM on March 7, 2014

At the very least, you need to set aside self-employment tax, which is 15.3% this year. If you're single, you are probably in the 25% bracket, which means that your marginal rate on this new income would be 25%. That means that theoretically you need to be setting aside 40.3% of this new income. However, that does not take into account deductions and credits, in particular business deductions such as expenses and mileage that you may be able to take out of your schedule C income. You're probably pretty close, anyway.

You could also just increase your withholding on your main paycheck; this would remove your need to actually send in estimated payments yourself.
posted by Sequence at 4:08 PM on March 7, 2014

Hrm, come to think of it, my withholding on my main income is a bit more than it costs (aka if not for this extra stuff I would get a small refund), so the 40.3% does sound right and I should be more careful myself in the future.
posted by foxfirefey at 4:50 PM on March 7, 2014

Thanks all!
posted by 1066 at 7:42 PM on March 7, 2014

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