[guinevere9876]

Hello :)
Every year husband and I enjoy a nice big tax refund (thanks to 2 children, EIC and moderate-level income.) Husband has gleefully quit the 9-5 job and is pursuing independent HVAC work from a licensed contractor friend. Said-contractor does not withhold taxes, and will issue a 1099.

How do we figure out how much 'tax' to 'withhold' from ourselves each paycheck (and squirrel away in a checking account somewhere) so that come next year, we can use that $ to pay the tax due?

Is this how 1099ers do it? We don't want to have to shell out a big chunk-o-money next April. Thanks in advance for any help/shared experiences.

[ScottGem]

You can get witholding tables from the IRS which will give you an idea of how much to sock away. You may have to pay quarterly estimated taxes as well.

[guinevere9876]

Thanks so much Scott - I'll go investigate at the IRS site. :)

[Fr_Chuck]

Also depending on how much he is earning, he may be required to file quarterly estimates. If not, if he owes over a certain level there are additional penalties.

Also besides the income tax for this, there will be social security taxes, normally when you work you pay a percent and the company pays a percent, but as self imployed you will be paying the entire amount also.

I found in the past about 40 percent of my money went to taxes or one nature or another.

[ScottGem]

I did mention about quarterly estimates. But that's a good point as social security taxes.

[AtlantaTaxExpert]

All answers are good! I have nothing to add.