Question from a reader:”Happy Cinco De Mayo, Kim. I am unemployed and have always been a good taxpayer. The problem is I don’t know what to do if I get some work later on. I have something that may be taking off but I think I will need the money to live on. Help.”
My answer is that your situation isn’t unique and you still will have to pay the taxes though on all worldwide income made in the United States. Depending on the state you are in, you will be on the hook for the state taxes as well. Now, if you are making less than Federal filing requirements (and the respective state), you won’t have to file.
Please remember too about both sides of social security and half of self-employment tax if you are paid as an independent contractor. Yeah, I know that it sucks major but that is the law and you will need to track this for filing a Schedule C for your business for next year when you file your income taxes.
A good idea will be to get an idea of what your tax bracket is now, especially if you have a spouse that is working. You can plan to pay quarterly taxes (and figure super roughly about a third for Fed and most state taxes) and you will have the rest left over for your use. You can also opt to not pay the quarterly taxes but you will have to some taxes at the end of the year and I don’t suggest you do it this way in case you get penalties for underpayment.
Good luck and I hope you get the job and Happy Cinco De Mayo back at you.
Stay safe and healthy, gang!
May 05 2009
If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book, Practical Money Making, that is listed right after his paragraph in this very post. There are some great suggestions and ways to survive the Depression we are in.
Interested in any of my books? You may want to make a stop over here. Please click through to purchase my books and some other interesting items that actually ARE on sale.
Have you read my book, “Bad Tax Idea, Good Tax Idea“? Please order it today. The tips inside can save you hundreds if not thousands of dollars! Tax planning should be done year round and not just two weeks into January or later.
Part of all the proceeds from the sales of that book go to Rett Syndrome research. One girl is born with Rett Syndrome worldwide every fifteen minutes. My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime. Boys born with the Rett gene generally die at birth.
Kim Isaac Greenblatt
Happy Cinco De Mayo and Unemployed Tax Question
Tags: Business