Tax Question

[Townhallsavoy]

If I'm making $20/hour on a side job and a 1099 is involved, how much can I expect to deposit into my bank account?

[AWK]

The entire amount...  Since you are responsible for withholding and paying your taxes when issued a 1099.

[Townhallsavoy]

But come tax season, I'll have to shell out some money, right? 

[wesfau2]

But come tax season, I'll have to shell out some money, right?

The tax lawyers will have the specifics, but that money is lumped into one big pile called "income".  You are then taxed on your "income", less and except any deductions you might avail yourself of.

[AWK]

But come tax season, I'll have to shell out some money, right?

Yes, hence what I said above.  It is generally a good rule to set aside a certain percentage of the amount you make to pay the tax debt when it is due.  The amount you will be taxed depends on the your income minus deductions/exemptions.  This amount, your taxable income, will show you what tax bracket you are in...That will show you the percentage you have to pay. 

[Townhallsavoy]

I guess I should just post the background -

I'm looking into doing a side gig teaching guitar at a local music shop.  They can give me 12 students.  Tuition is $80/month per student, and the owner of the music shop wants to take 50% for providing the students and the room and materials for teaching.  That brings the money down to $40/month per student minus whatever I lose through taxes.

I'm trying to figure out if whatever money I'll be bringing in is worth working six extra hours a week. 

[chinook]

short of it ...you will see about a third of it gone. 

[AWK]

I guess I should just post the background -

I'm looking into doing a side gig teaching guitar at a local music shop.  They can give me 12 students.  Tuition is $80/month per student, and the owner of the music shop wants to take 50% for providing the students and the room and materials for teaching.  That brings the money down to $40/month per student minus whatever I lose through taxes.

I'm trying to figure out if whatever money I'll be bringing in is worth working six extra hours a week.

Like Chinook said, generally take away 1/3 and the remainder is what you will bring home after taxes.

[Townhallsavoy]

So approximately $350/month to work six extra hours a week. 

Well that answers that question.  I could make that much money if I had half the amount of students but just taught them from my house.  Actually, probably more. 

[Kaos]

Don't forget, you can deduct EVERY dime you ever spend and then some!!!

By the time you get through deducting you'll be making thousands and thousands a week!!!!!

Just ask a tax lawyer. 

 

[AWK]

Don't forget, you can deduct EVERY dime you ever spend and then some!!!

By the time you get through deducting you'll be making thousands and thousands a week!!!!!

Just ask a tax lawyer. 

 

Not every dime, but you can deduct wages you pay out.

[Kaos]

Not every dime, but you can deduct wages you pay out.

Unless you can't.

[War Eagle!!!]

So approximately $350/month to work six extra hours a week. 

Well that answers that question.  I could make that much money if I had half the amount of students but just taught them from my house.  Actually, probably more.

Just tell the guy you want to work for cash money yo, or you aint doin it...

Or give him a fake SS#...

Or that you want 75%...

[Saniflush]

knock 15% off and tell the guy that's your cash price if there is no paperwork.

[AUTiger1]

Wesley Snipes would not approve of this thread.

[GH2001]

Wesley Snipes would not approve of this thread.

Just wait til chimes in

[Kaos]

Wesley Snipes would not approve of this thread.

If he would just log in here, all his tax troubles would disappear.  He'd find out that he can deduct every penny he ever spent, even on sharp brims and playa threads.  All deductible.  Everything spent can be written off.

By the time he got through being educated on this board, the IRS would owe HIM money.  Tons of it.

[AWK]

Unless you can't.

You can. No business owner ever has had to pay income tax on their employee's wages.  It wouldn't make sense to be in business.  Also, it would be double taxation.  If you think that you have to pay income tax on your employees wages AND they pay income taxes on their wages as well, then you need to read a book.  It's not income to you. 

You just don't like to be called out for being wrong, so you get butt sore. Troll Kaos likes to troll.

[GH2001]

butt sore.

knows this feeling too. But for other reasons.

[AWK]

Deductible Compensation and Benefits

As a general rule, a business can claim a tax deduction for the salary, wages, commissions, bonuses, and other compensation it pays to its employees. In fact, if you have employees, it's likely that your deductions for employee compensation will be one of your largest deductible expenses.

To be deductible, the compensation must be ordinary and necessary, reasonable in amount, based on services rendered, and actually paid or incurred in the year for which the deduction is claimed (as shown by your payroll records).

QQ moar.