Has anyone here been a 1099 worker before?

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  • ODogg
    Hall Of Fame
    • Feb 2003
    • 37953

    #1

    Has anyone here been a 1099 worker before?

    I am possibly looking at a job as a 1099 contractor and have not done it before. I have been a w2 contractor before so I already have my own medical, dental, etc and i am used to not having vacation, sick days etc. The company told me that the main difference from that and 1099 work is that you are responsible for withholding your own taxes.

    Is that pretty much all I need to know here? I also believe I will need to withhold more money than I did as a w2 worker because I guess employers typically contribute to your Medicare, FICA, etc. The question is how much more?

    Any insight from someone who has done this before is greatly appreciated.
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  • ImTellinTim
    YNWA
    • Sep 2006
    • 33028

    #2
    Re: Has anyone here been a 1099 worker before?

    Yes, as an independent contractor receiving a 1099, you will owe both the employee and employer share of FICA and Medicare taxes.

    For 2011, the FICA employee share is 4.2% and the employer share is 6.2% for a total of 10.4%.

    Medicare employee and employer share are both 1.45% for a total of 2.9%.

    I'm almost positive NDAlum did some contract work last year, so he might be able to help you out with the actual tax filing you'll have to do. I've always been a straight employee with a W-2 and have never filed taxes for 1099 work.

    Comment

    • fistofrage
      Hall Of Fame
      • Aug 2002
      • 13682

      #3
      Re: Has anyone here been a 1099 worker before?

      Originally posted by ODogg
      I am possibly looking at a job as a 1099 contractor and have not done it before. I have been a w2 contractor before so I already have my own medical, dental, etc and i am used to not having vacation, sick days etc. The company told me that the main difference from that and 1099 work is that you are responsible for withholding your own taxes.

      Is that pretty much all I need to know here? I also believe I will need to withhold more money than I did as a w2 worker because I guess employers typically contribute to your Medicare, FICA, etc. The question is how much more?

      Any insight from someone who has done this before is greatly appreciated.
      Thats really the main factor and you might want to pay estimated taxes in if that is going to be your sole income.
      Chalepa Ta Kala.....

      Comment

      • ImTellinTim
        YNWA
        • Sep 2006
        • 33028

        #4
        Re: Has anyone here been a 1099 worker before?

        Originally posted by fistofrage
        Thats really the main factor and you might want to pay estimated taxes in if that is going to be your sole income.
        Yeah, forgot about that. They will not withhold anything for you, so you might not want to be stuck with that huge bill when you file.

        Comment

        • ODogg
          Hall Of Fame
          • Feb 2003
          • 37953

          #5
          Re: Has anyone here been a 1099 worker before?

          My per hour salary would be the same as my W2 job. So should I just take the amount that I paid in for last year and add about 5% on top of that and have that be the amount that I'd have saved back to pay into taxes next year? Or should I do more than that? I just don't want to have tax time come around next year and owe a crapload of money.
          Streaming PC & PS5 games, join me most nights after 6:00pm ET on TwitchTV https://www.twitch.tv/shaunh20
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          Comment

          • ImTellinTim
            YNWA
            • Sep 2006
            • 33028

            #6
            Re: Has anyone here been a 1099 worker before?

            Originally posted by ODogg
            My per hour salary would be the same as my W2 job. So should I just take the amount that I paid in for last year and add about 5% on top of that and have that be the amount that I'd have saved back to pay into taxes next year? Or should I do more than that? I just don't want to have tax time come around next year and owe a crapload of money.
            Closer to 6%, just to be safe, I would say.

            Here's the site that's going to answer all of your questions.



            And here:

            Last edited by ImTellinTim; 03-10-2011, 06:32 PM.

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            • ODogg
              Hall Of Fame
              • Feb 2003
              • 37953

              #7
              Re: Has anyone here been a 1099 worker before?

              Thanks man, you're a lifesaver! As for what I ultimately withhold, I think i've spoken to enough people now that I'll be going to a CPA just to be on the safe side. I'll probably err on the side of caution and put back 10% more. I make good money and plan to save a good chunk of change anyways. Once I get a year under my belt and file my taxes next year I can adjust as necessary.
              Streaming PC & PS5 games, join me most nights after 6:00pm ET on TwitchTV https://www.twitch.tv/shaunh20
              or Tiktok https://www.tiktok.com/@shaunh741

              Comment

              • NDAlum
                ND
                • Jun 2010
                • 11453

                #8
                Re: Has anyone here been a 1099 worker before?

                Self employment tax is what gets you (15%)

                Then the other taxes that folks talk about

                However, the good news is: you can hold on/invest the money you make and then pay taxes when the time rolls around. Some people are advocates for govt not holding their money all year.
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                • ImTellinTim
                  YNWA
                  • Sep 2006
                  • 33028

                  #9
                  Re: Has anyone here been a 1099 worker before?

                  Originally posted by NDAlum
                  Self employment tax is what gets you (15%)

                  Then the other taxes that folks talk about

                  However, the good news is: you can hold on/invest the money you make and then pay taxes when the time rolls around. Some people are advocates for govt not holding their money all year.
                  That's what it was in 2010, this year with the 2% drop in employee FICA share it went from 15.3% to 13.3%.

                  Comment

                  • NDAlum
                    ND
                    • Jun 2010
                    • 11453

                    #10
                    Re: Has anyone here been a 1099 worker before?

                    That's why you're the S.O.S. Accountant!
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                    • fistofrage
                      Hall Of Fame
                      • Aug 2002
                      • 13682

                      #11
                      Re: Has anyone here been a 1099 worker before?

                      Originally posted by NDAlum
                      Self employment tax is what gets you (15%)

                      Then the other taxes that folks talk about

                      However, the good news is: you can hold on/invest the money you make and then pay taxes when the time rolls around. Some people are advocates for govt not holding their money all year.
                      Thats not exactly true, if you make too much money and do not pay quarterly estimates, you can face fines and additional fees.
                      Chalepa Ta Kala.....

                      Comment

                      • p_rushing
                        Hall Of Fame
                        • Feb 2004
                        • 14514

                        #12
                        Re: Has anyone here been a 1099 worker before?

                        Originally posted by fistofrage
                        Thats not exactly true, if you make too much money and do not pay quarterly estimates, you can face fines and additional fees.
                        Yep. I got fined $12 for interest in Pennsylvania for not paying my 4th quarter taxes. I work in different states and allocate my taxes every quarter and my company handles the adjustments to the state taxes. I missed the cut off though for the 4th quarter and had to get an adjusted W-2. So I had to pay my 4th quarter taxes when I filed, which they then fined me for following year.

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