munkyman12
Jan 26, 2007, 10:16 AM
I work as an independent contractor and was recently given a bonus check for 7500. I was told that I would need to set aside 40% for taxes. Is this right? Is there some sort of scale used for this or is it always 40% no matter how much bonus you receive?
AtlantaTaxExpert
Jan 26, 2007, 10:31 AM
Yes, 40% is about right, depending on your overall income and the state you work and live in.
Most people are in the 15% marginal income tax bracket, and the self-employment tax is 15.3%, so that's 30.3% right there. Factor in the state income tax and you are right at 40%.