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Opinions Please

August 26th, 2013 at 03:08 pm

There has been a position open up at my work. It is a part time position, 10-30 hours per week. It pays $8 per hour. Only catch is it is a 1099. I am hesitant for this reason. But I figure if I put 15% of each check away, that should cover what I owe at the end of the year, right?

I haven't heard from any of the applications I put in and I am pretty desperate for money.

Just want some opinions on this.

Thanks!

Posted in Misc Thoughts and Updates | 8 Comments »

8 Responses to “Opinions Please”

  1. creditcardfree Says:
    August 26th, 2013 at 03:15 pm 1377530122
    1377530122

    I haven't been in a 1099 position, but I know I would definitely do some of my own tax withholding if I were.

  2. ceejay74 Says:
    August 26th, 2013 at 03:17 pm 1377530220
    1377530220

    I believe you typically get a large refund every year, right? So you might be taken care of; you'll just have a smaller refund.

  3. Bob B. Says:
    August 26th, 2013 at 03:31 pm 1377531079
    1377531079

    You'll have to pay Self Employment tax (15.3%). Think FICA tax (7.65%) times two. It includes the employer half and employee half, and since you're both the employer and the employee in a 1099 situation, you pay the whole thing.

    You'll have to pay federal income taxes (10%?).

    If your state has an income tax, you'll have to pay that. (4-6%?).

    So, 29-31% saved from each check for taxes would be a better target. Depends on state tax rate. As noted above, also depends on how much you have withheld from your regular pay checks. Your refund would be credited against what you owe for 1099 income.

    But, yeah, my vote is to go ahead and take the job.

  4. Petunia 100 Says:
    August 26th, 2013 at 03:39 pm 1377531578
    1377531578

    Can you handle up to 30 hrs per week in addition to your regular duties? An extra 10 hrs per week is one thing, but 30 is quite another. Smile

    Self-employment tax is 15.3%, so setting aside 15% regularly will come very close to covering it. However, you must also pay income tax. If you normally receive a large refund, is that from overwithholding, or from a tax credit?

    That doesn't mean you shouldn't do it, but it is something to keep in mind when it comes to the pay. Making $15 per hour (for example) as a contractor is not the same as making $15 per hour as an employee.

  5. laura Says:
    August 26th, 2013 at 03:58 pm 1377532707
    1377532707


    Good luck to you! I can offer no advice about 1099 withholdings. Maybe give it a try and see if it is 10 hours or 15 hours and not 30 hours. Let us know!

  6. Wino Says:
    August 26th, 2013 at 04:09 pm 1377533354
    1377533354

    After taxes, that's only about $6 per hour or less. Is 30 hours of your time worth another $180 per week to you, plus the added hassle of sending off the payments? Regardless if the extra money for Federal taxes is already there in your normal refund, you still will have additional IRS forms to fill out for self-employment tax. Do you do your own taxes? If so, no biggie, just a couple of forms. If someone else does them, that's another expense you'll have to pay.

    Personally, I'd probably be more willing to deliver pizzas or similar and let someone else do the paperwork. Plus, I'd probably get more money in the long run with less hassle and likely fewer hours. For $6 per hour, the work had better be for little thought and little responsibility.

  7. Maranatha Says:
    August 26th, 2013 at 06:25 pm 1377541545
    1377541545

    Will you be able to put the self employment taxes etc away without being tempted to use for bills and such? If not you'd be in trouble at the end of the year having to come up with a large amount of money. Good luck on your decision!

  8. getforfree Says:
    August 26th, 2013 at 06:59 pm 1377543594
    1377543594

    If you think you will get refund like last year, then you don't need to adjust anything, because it's the end of a year anyways. The next year you can just increase your withholding from your regular job to cover the new job's taxes and don't have to hassle with sending any payments anywhere. As long as you don't owe any tax when you do your tax refund next year, you don't need to send any payments. Also, depending on your job, if you need to purchase any supplies, or use your cell phone for it, or even mileage on your car if you have to drive on the job and they reimburse less than the standard on taxes, you can write off all that, so keep your receipts and write down miles on your calendar.

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