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I have been offered a job in SF which pays $80k a year, the role requires me on site so I'll have to move to the city but I will be working as an independent contractor.
Can anyone help me figure out roughly how much tax I can expect to pay, online tax calculators give me wildly different amounts from $12,000 to $25,000 - even though I am entering in the same information.
I am moving over from Ireland so the US system is kind of new to new.
Use something like the online version of Turbotax to create a "fake" tax return (just don't submit it) for last year using estimated numbers. That should give you a pretty good idea of your federal tax liability. You'll owe state taxes on top of that.
Since you'll be an independent contractor, don't forget Social Security taxes (both employer and employee share - 15.3% total I believe) on top of the income taxes.
Are you married? Kids? $80K as an independent contractor in SF will be really tough imo.
You have to pay federal taxes which is 25% (marginal not effective), plus 9.3% California State tax (again marginal) - so the tax rate will be lower, maybe 25% for both with your deductions.
But then you will have to pay both the employee and employer FICA taxes as an independent contractor, so another 15.3%
Add in the high cost of living plus rent and I assume no benefits as an independent contractor (e.g. medical insurance).
Here are the numbers:
Federal: $8,360
State: $3,015
Self-employment/FICA: $12,240
TOTAL: $23,615/$80,000 = 29.5%
This is assuming married filing jointly and a $80,000 income. Take solace in the fact that if you were single, it would be $7,000 more! Yes, not fair for us single people.
You have to pay federal taxes which is 25% (marginal not effective), plus 9.3% California State tax (again marginal) - so the tax rate will be lower, maybe 25% for both with your deductions.
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