am i paying too much taxes?

[Link]

hi -

i used turbotax to do taxes for my regular job. showed kids as dependents, donations, the whole nine yards. my fed return is $2,000 and state is $800. $2800, fine.

however, i did one contract last year and made $16k. the contract agency isn't returning my calls and may not send me a 1099. i proceeded to use turbotax schedule C form to input this additional income. to my surprise, the $2,800 from above went spiraling down to a -$1750 balance owed, with only a $150 state refund left. that's $4,400 i am owing on this 16k?! does that sound right?

[MonkeyMama]

Yes, that sounds about right. If you did not have any taxes withheld from contract income (probably not). Plus, you will be paying social security/Self-employment tax on top of income tax. Without knowing more, I can't speak to the accuracy of your figures. But I presume if you entered it on schedule C that is correct.

$4550 taxes on $16,000 income comes out to about 28% for Federal, state and self-employment taxes. Sounds very reasonable.

[MonkeyMama]

P.S. Quick tax tip - you can fund a SEP IRA to lower the taxes. If you have the cash to fund a SEP by April 15th. Turbotax will tell you how much you can put into a SEP, based on your Schedule C income.

[Link]

thanks MonkeyMama. 28% does sound right. for some reason i kept thinking 40% in my head. i am getting old!

[sblatner]

Also, you can lower your self-employed taxable income by deducting your expenses - cell, internet, etc. All will appear on your Schedule C.

[~bs]

hi -

i used turbotax to do taxes for my regular job. showed kids as dependents, donations, the whole nine yards. my fed return is $2,000 and state is $800. $2800, fine.

however, i did one contract last year and made $16k. the contract agency isn't returning my calls and may not send me a 1099. i proceeded to use turbotax schedule C form to input this additional income. to my surprise, the $2,800 from above went spiraling down to a -$1750 balance owed, with only a $150 state refund left. that's $4,400 i am owing on this 16k?! does that sound right?

Without knowing more, it sounds about right.

You'd basically need to disclose your agi income, how many kids, if you're married, if you itemize, etc for more precise numbers.

A 16k difference on a schedule c is quite a bit of money, especially if you weren't witholding fed/state taxes on it. Also note that it's subject to the self employment tax of 15.3% on profit, of which the employer portion is deductile. Not sure if the software does that calculation automatically, but I'd imagine it would.

[UnknownXV]

I also fall into the silly trap of thinking the money I earned was actually mine. We all make mistakes.

[thesimplemoneyblog]

I agree with the others (again, without knowing additional information about your situation).

[siggy_freud]

I also fall into the silly trap of thinking the money I earned was actually mine. We all make mistakes.

Poor guy doesn't like paying taxes it sounds like .

[UnknownXV]

Who does? Minor taxes here and there, to fund the basic government we should have; that's fine. All we have now is a bloated inefficient leach on our economy and core being. Even though it takes so much from us, we're still in debt for over 100k per taxpayer because the government is even more irresponsible than a spoiled teenager girl.