radioguy01
Pre-Flight
- Joined
- Jan 12, 2014
- Messages
- 46
- Display Name
Display name:
radioguy01
Hi all,
I've been a W2 employee for years, and have just started getting paid at my second job (as an "independent contractor") as a 1099 employee. My 1099 job is as an LLC (Radioguy LLC for the sake of this discussion.)
So, I'm trying to understand how taxes work under this circumstance. For example:
I rent a hanger for $400/month, and this calendar year I purchased an airplane outright, lets say for $15000. These are all to be owned by Radioguy LLC. (I even set up my office in my hangar's extra space, so it's double official.) I purchased a desk, and some other stuff for my hangar/office, so lets say that's another $1,000 in furniture.
So, last year when I was working my second job as a 1099 employee, I saved approx 33% of each paycheck, and payed that as quarterly taxes. I ended up just about breaking even last year with taxes between my 1099 and my W2 job. My question is, how do I calculate how much I need to pay in quarterly taxes now that I'm going to have a lot of write offs? (I should get a better break this year because we had a child in January.)
For example, I will write off 12 months of hangar fees ($3200), the cost of my plane ($15,000), furniture ($1000), etc. So how do I calculate how much to pay in my quarterly taxes? Let's say my expected earning at my 1099 job is $100,000/year (for a nice round number.) That would put me paying about $33,000 in taxes, or $8250/quarter last year. But this year if I make $100,000 at the 1099 job, I plan to expense at least $15,000 + 3200 + 1000 = $19200. So does that mean I should budget like $100,000 - 19,200 = 80,800 * 0.33 = $26,665 / 4 = $6666 per quarter for my taxes instead of the $8250 I paid last year?
Basically, shouldn't I only be paying taxes on what I will count as income? Argh, this confuses the heck out of me. I need a CPA.
I've been a W2 employee for years, and have just started getting paid at my second job (as an "independent contractor") as a 1099 employee. My 1099 job is as an LLC (Radioguy LLC for the sake of this discussion.)
So, I'm trying to understand how taxes work under this circumstance. For example:
I rent a hanger for $400/month, and this calendar year I purchased an airplane outright, lets say for $15000. These are all to be owned by Radioguy LLC. (I even set up my office in my hangar's extra space, so it's double official.) I purchased a desk, and some other stuff for my hangar/office, so lets say that's another $1,000 in furniture.
So, last year when I was working my second job as a 1099 employee, I saved approx 33% of each paycheck, and payed that as quarterly taxes. I ended up just about breaking even last year with taxes between my 1099 and my W2 job. My question is, how do I calculate how much I need to pay in quarterly taxes now that I'm going to have a lot of write offs? (I should get a better break this year because we had a child in January.)
For example, I will write off 12 months of hangar fees ($3200), the cost of my plane ($15,000), furniture ($1000), etc. So how do I calculate how much to pay in my quarterly taxes? Let's say my expected earning at my 1099 job is $100,000/year (for a nice round number.) That would put me paying about $33,000 in taxes, or $8250/quarter last year. But this year if I make $100,000 at the 1099 job, I plan to expense at least $15,000 + 3200 + 1000 = $19200. So does that mean I should budget like $100,000 - 19,200 = 80,800 * 0.33 = $26,665 / 4 = $6666 per quarter for my taxes instead of the $8250 I paid last year?
Basically, shouldn't I only be paying taxes on what I will count as income? Argh, this confuses the heck out of me. I need a CPA.