Ok, so Ive tried to google this, and I get a wide array of answers.

The position says:

Quote :

" The position will be fulfilled under an agreement for professional services (independent contractor)"

I know this means I have to pay more tax. How much more is what I cant figure out. The salary is $34,000 for a 1 year contract. So how much can I expect to have to pay taxes on? Is it worth it?

Thanks for your help! Let me know if you need any more details

7/17/2011 11:18:28 AM

I believe you have to pay the normal federal and state taxes on it; then, there is also a self employment tax around 13.3%. You'll also have to do quarterly estimated taxes, the record keeping is a pain in the ass.

[Edited on July 17, 2011 at 11:26 AM. Reason : :]

7/17/2011 11:24:34 AM

Why don't you download tax forms from the previous year and estimate it....

7/17/2011 11:26:26 AM

It's only the 13.3% if you fall into the general self employment bucket.

NC has a bunch of specialty types for businesses that you may fall into to lower your tax burden. Since it's under 40k you should fall into the AMT bracket for your federal taxes.

After all your taxes you'll probably net $28k for the year.

It's a gross pay of ~ 16 bucks an hour, net pay of 13.50 an hour. Basically double minimum wage.

7/17/2011 4:44:05 PM

I thought you wuold effectively be paying ~ 6% higher in taxes because you're paying both employee and employer side if medicaire/ss/fica. but, i just googled it and I agree its confusing

7/17/2011 6:02:23 PM

I think the rate you get paid is roughly calculated to take that into account, like so that (ind.cont. pay)-(SE tax)=(W2 pay)-(payroll tax); because your payroll/SE tax is deducted from your taxable income, the two really would be equivalent even for income-tax purposes, but it's easier on the employee to use ind.cont. because IIRC it takes fewer staff to deal with the paperwork for independent contractors, while AFAIK there are rules to ensure that employers don't all use ind.cont. status for their employees.

[Edited on July 17, 2011 at 7:04 PM. Reason : wonk

7/17/2011 7:03:39 PM

SAVE

EVERY

RECEIPT

7/18/2011 12:05:18 AM

I disagree with that last part.

If you keep accurate receipts, doing your own taxes isn't an issue.

7/18/2011 1:27:32 PM