4 ms·
I plugged his numbers into a Numbers spreadsheet I use for estimating my taxes including self-employment tax. This should be the maximum that he would owe for 2
by zefhous 13y ago
I plugged his numbers into a Numbers spreadsheet I use for estimating my taxes including self-employment tax. This should be the maximum that he would owe for 2013, though there is surely more that he can deduct.
It accounts for his wife and child, but does not take into account any personal deductions like mortgage interest, donations, or anything else. The state rate is approximately correct for Idaho where he lives though the state uses brackets below $10,000.
Just from the amount of deductible self-employment tax he's close to using itemized deductions, but would have to add more personal deductions to get to that point.
Business income: $256,725.00
Business expenses: $65,000.00
Self-employment tax amount: $19,233.48
Self-employment tax effective rate: 7.49%
Federal tax amount: $34,625.50
Federal tax effective rate: 13.49%
State tax amount: $12,463.45 (assuming flat rate of 7.4%)
Total tax amount: $66,321.43
Total tax effective rate: 28.38%
Here's a screenshot of the sheet I used: http://cl.ly/image/1N3M3U3Z2X2x http://cl.ly/image/1N3M3U3Z2X2x
- chiph 13y agoNathan needs to get a CPA to do his taxes. I finally got one about 2 years ago and had him look at some of my older returns. Turns out I wasn't accounting for rental property income correctly, and he was able to get me several thousand back (plus interest!) from the IRS. Totally worth it.
- WalterBright 13y agoI agree. With the amounts he's dealing with, a CPA is necessary.
- nathanbarry 13y agoI actually haven't done 2013 taxes, just my estimated payments for the year. I was expecting to make a little more, so my estimated payments should be a bit high. I do have a CPA who will do my actual taxes.
- narrator 13y agoAre you living in the U.S? If so, what about health insurance and other benefits you had to provide for yourself? I'd really like to see how it compares to your old job after everything.
- nathanbarry 13y agoI have a $280/month plan that has a $5,000 deductible. Most doctors visits are covered entirely, and a few have a $35 co-pay. That plan includes myself, my wife, and our 2 year old son. We are all quite healthy, so the plan is pretty cheap. Unfortunately it is going up to about $375/month with a slightly higher deductible starting next year. With my previous job they paid for a plan that was about $700/month and had a $1,500/year deductible. Though that was more expensive since I was on a group plan (and I'm cheap to insure).