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    dawn12's Avatar
    dawn12 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Nov 5, 2008, 07:52 AM
    Consulting 1099 Tax
    Hi, I was wondering what I would be paying in taxes based on a 1099 based on 4,000 a month and 6,000 a month. I'm trying to determine what my take home pay would be after I pay my own taxes. I have an offer and I'm trying to negoiate now.

    I'm thinking 1099 is my better bet instead of W2. What are your thoughts? Thanks
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Nov 5, 2008, 10:49 AM
    Dawn:

    Your self-employment tax on your NET income as an independent contractor is 15.3%.

    Income tax rates for the IRS start at 10%, then rise to 15%, and eventually 25%. There are higher tax rates, but your income level tops out at 25%.

    Your state income tax liability depends on the state (which you failed to identify).

    Now, whether 1099 is better than W-2 depends entirely on the nature of your work! If you have a job that offers a lot of built-in deductions that reduce your net income on Schedule C, then 1099 income as an independent contractor offers several advantages over a W-2 job.

    Please tell us the nature of your work so we can better answer your question.
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