Independent Contractor Tax Write Off Question?

[xrac]

I think you lack a basic understanding of how this works.
You need either software to hold your hand, or a professional to do it for you.
You take your gross income, make all your deductions, THEN you figure your amount owed based on your net income.
You're not going to spend more than a hundred dollars on the software you need. Some options will cost you less than that. It's worth every penny.
All you worry about doing is plugging in your numbers when prompted for them by your tax software, and let it do the figuring. I've NEVER filed by hand, and wouldn't recommend it for you. Use software, or get an accountant.

This is the best response thus far to the OP. The OP shows a lack of basic understanding. Your tax bracket is determined by what your net income is after all deductions and credits. You do not write off any of the net. If you do not pay any taxes at the end of the year you are basically not making any money or are cheating on your taxes. Don't forget that you also have to pay FICA and Medicare taxes.

 

[sman]

Does anyone know out of that 33% how much you can write off? Can you write off all the 33%? I know if you write under a LLC it is 15% in taxes. Out of that 15% how much can you write off?

The taxes you pay is dependent on the income you earn. Throwing out percentages is useless. Whoever is telling you 33% or 15% for LLC isn't the person you need to listen to.

Do yourself a favor and have a conversation with a CPA.

 

[Thad.Sipple]

This is the best response thus far to the OP. The OP shows a lack of basic understanding. Your tax bracket is determined by what your net income is after all deductions and credits. You do not write off any of the net. If you do not pay any taxes at the end of the year you are basically not making any money or are cheating on your taxes. Don't forget that you also have to pay FICA and Medicare taxes.

That would be called self employment tax.

 

[xrac]

That would be called self employment tax.

Correct and that is 15.3% of the net.

It should be noted that anytime self-employment tax is mentioned, it only refers to Social Security and Medicare taxes and does not include any other taxes that self-employed individuals may be required to file. The list of items below should not be construed as all-inclusive. Other information may be appropriate for your specific type of business.

 

[noah808us]

I think you lack a basic understanding of how this works.
You need either software to hold your hand, or a professional to do it for you.
You take your gross income, make all your deductions, THEN you figure your amount owed based on your net income.
You're not going to spend more than a hundred dollars on the software you need. Some options will cost you less than that. It's worth every penny.
All you worry about doing is plugging in your numbers when prompted for them by your tax software, and let it do the figuring. I've NEVER filed by hand, and wouldn't recommend it for you. Use software, or get an accountant.

Thank You. I got it now.

 

[Heather]

I have used Turbo Tax for years, never any problems. Not sure if it applies to you but a 1099 person gets all the tax credits like a w-2 employees would for things like, dependents, child tax credits, education credits the software asks you all the questions. Just make sure at the end you buy the optional "Audit Defense" I guess if you get audited they have tax pros help you out. I have been known to write off every paperclip and pen in the office at tax time. Just keep in mind that if you are going to be making any major purchases during the year like a house that you don't write off to much of your income and have it looking like you only made 20k for the year.