i work for two agencies and they do not take taxes out. I was wondering how can i find out about federal and state witholdings to do it myself .There was a website that had a calculator to do it according to the amout you earned but i cannot locate it now .
You may also try to tell the next agency that you work for that you need to work on a W2 basis only. Generally on W2 you will bring home more money in the long run than if you do your own taxes. This will also leave the burden of figuring out the taxes on them and not yourself.
Aug 12, '03
I have to disagree with the last post. You will bring home substantially more money if you are an independent contractor, and you take advantage of the home office deduction as well as many others. If you establish your own corporation, as I have, the tax savings will go even further.
Aug 13, '03
you seem to know alot i have calculatee my taxes and i was wondering do i take out for medicare ,disability etc and how do you establish your own corporation .
Aug 13, '03
The way I was instruced to do it by the owner of the company that sets up my contracts was to withhold approx 25-30% of your check and put it into a money market account. This should cover you fed,state and self employment tax, then file with a CPA or someone who knows about small business tax at the end of the year. After your first year you are expected to pay your fed/state/self employment taxes quarterly, they will base this on the total tax you paid in the previous year then devide it by four. The advantage of being and independent contractor is that you are able to establish a home office and then use many business write offs (meals, education,health insurance,travel,etc).
The idea behind establishing a corporation is that you are able to avoid much of the self-employment tax since all the revenue is going into your corporation. Example: your corporation earns 100k, you pay your self 30k the balance in between covers expenses: office lease, vehicle lease, cell phone, education, pension, internet expense, etc, all of which is not subjected to the self employement tax only the 30k is.
Fortunately for myself all of this was laid out by an attorney and a CPA that I hooked of with from the Agency owner that sets up my contracts. Thats why I reccomend finding people like these in your own area with knowlege on these issues. The cost was approx 1500 bucks, but well worth the expense
Aug 20, '03
Sounds like an exciting option for many nurses, XKRed! Thanks for sharing so freely what you have learned.