Author Topic: social security and estimated taxes for a contracter. where do i start?  (Read 1124 times)

wotan

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wife and i moved to Myrtle beach to take care of wife's father. father has long term health insurance that has home care benefit. wife started working for Griswold company as a private contracter to take care of him. he was using Griswold before we moved down. can someone provide any info on making social security pmts. and estimated taxes. Griswold will not help us. thanks

dandarc

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Well, you've got to estimate your taxes, then send them in.  Quarterly - April 15th, June 15th, Sept 15th, January 15th are the due-dates.

Easy part is sending them in - https://www.eftps.gov/eftps/ lets you do this electronically - easy and free.

Estimating - at minimum you have self-employment tax.  Basic computation is: Contractor Net Income (after business expenses, if there are any - before retirement contributions like individual 401K though) * 92.35% * 15.3 % (assuming your wife is not going over the social-security wage limit of $118K).

Then you've got federal income tax to consider.  The case-study spreadsheet in the sticky "How to write a case study" at the top of "Ask a Mustachian" can help with this.  Since this involves all sources of household income, not just the contractor income, can't help with specifics.

And since you're in South Carolina, you have state income taxes to deal with too.  I live / work in Florida, where we don't have state income taxes, so I'm no help there.

seattlecyclone

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Also if you're married filing jointly the IRS really doesn't care which one of you pays the taxes. If you would prefer not to mess around with sending the IRS a separate payment every quarter, you can just increase the withholding on your own paycheck (assuming you're still working) and it counts just the same.