I live in NJ and work in NYC. Currently I am a 1099 employee and would like to know what to expect when I file my quarterly taxes. How much will I likely be paying and do I need to file quarterly for the NY State and Federal?

My employer has offered me a full time W2 position with benefits, at a pay cut. I am trying to work out my "take home" pay. I have not been in this area long enough to pay taxes yet, and have no idea what the percentage is. Can you help? I don't want to accept the position on what sounds reasonable, and then not have enough money after paying the government!

Thanks!

AtlantaTaxExpert

You will pay NORMAL income taxes, state and local. The NY state tax is HIGHER than NJ, so you will end up paying NO NJ state taxes (though you DO have to file a return).

As a 1090 contractor, you pay BOTH sides of the FICA taxes as self-employment tax. The rate is 15.3 (7.65% as the employee and 7.65% as the employer), so you technically pay about 8% more in taxes.

However, you can claim a LOT of expenses on the Schedule C that you cannot claim as a employee, like business use of your cell phone, business use of your home (if you maintain a home office), and business mileage for your car (NOT commuting expenses, though).

So it is possible that working as a 1099 employee is the BETTER deal.

How much is the pay cut for the W-2 job??

shortstuff6416

What can I expect to take home as a percentage of my salary? This is after taxes I mean. I can deduct my insurance cost from there.

Thanks!

AtlantaTaxExpert

You CAN deduct health insurance for yourself and your family (if you do NOT get it through your employer) as a 1099 contractor.

As for the take home pay, that depends on how many exemptions you claim on Form W-4.