Posted by Les_CO on 4/17/11 10:43am
Msg #380140

A Tax Question for anyone that may know

Tax question?
If I’m self-employed, and I send in quarterly estimated tax payments (Form1040ES) how do I determine what the “OASDI” and Medicare tax to be? No I don’t give myself a weekly pay check; I just take money out of the business when I need it (if it’s there)
My further question is: If the SS withholding (employees) this year is 4.2%, and the employers portion is still 6.2% and Medicare is 1.45% for a total of 11.85%? If I make $4000.00, during a quarter, I would need to send in $474.00 for combined SS and Medicare withholding? Along with say an additional $500 for federal income tax. (I know there is virtually no fed tax liability on $12000 income, I’m just using estimated figures.) On the 1040ES I see no place for the SS/Medicare withholding? Is there another form? Yes I know I should call an accountant, but this is for someone that is in this business, and they asked me. I actually have an accountant that does my returns, and I collect SS (I’m glad I paid in now, I was advised because of the ‘double’ tax on self employed, to avoid paying SS in if possible.)
I would think because almost all of us are self-employed that someone that does their own taxes would know?
THANKS!

Reply by John Tennant on 4/17/11 12:28pm
Msg #380145

http://www.irs.gov/pub/irs-pdf/f1040es.pdf

Full instructions at this website.

Reply by Les_CO on 4/17/11 3:43pm
Msg #380170

Re: http://www.irs.gov/pub/irs-pdf/f1040es.pdf

Thanks John! Got that and printed it out. I haven’t a clue about taxes. I have always had someone prepare my stuff for me. From what I gather if your self-employed through a Corp (s –chapter) or a LLC it doesn’t make much difference, you just pay quarterly your estimate, and sort it out on your final return. Or you pay yourself a ‘salary’ withholding a percentage, and sending that to the government weekly or monthly. I’m not asking any questions here. I told my friend to file whatever, and seek professional help.

Reply by taxpro on 4/18/11 6:07pm
Msg #380305

Les, maybe too late for this but

Self-employment tax is 13.3% for 2010. For the SS part, 4.2% "employee", 6.2% "employer, plus the medicare 1.45% "employee" and 1.45% "employer." Add federal income tax to that, and pay it all together. It all ends up on the 1040 anyway.

I've just finished filing all my last minute tax returns and extensions, and haven't been here in a while.