Accounting questions about 1099

Accounting questions about 1099

Spokane, WA · Member since 2018 · 10 posts · 3 votes

Hey BP! My name is Noah Simmons and I am new to the REI world. Currently I am subbing out my work as a contractor for real estate investors and with every job over about 500 bucks I've been paid through a 1099 rather than a W2 employee or just cash deal.

I’ve been setting aside money from each one for the end of the year (30% for each job). However, this is my first time working as a subcontractor, and I want to make sure I’m doing this right. 

So is 30 percent of each job enough/too much? I keep records of my work and the pay. Is there anything else I need to be aware of? Also I have a full time job as well, so my taxes are going to be more complicated than in the past. I’ve done my taxes myself up till now, but bringing 1099’s into the mix with my w2 job is going to mix things up. Is it still doable to take care of my own taxes or should I see a cpa?

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Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
7y

Take it to HR block person for answers unless you need a CPA.

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  • Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    7y

    Take it to HR block person for answers unless you need a CPA.

  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    7y

    @Noah T Simmons

    You are correct - your tax return is more complicated than it was in the past.

    Whether 30% is the proper amount to set aside from your contract work depends on several factors.

    If you have a lot of expenses to generate the income; The gross amount is not taxed; only the net figure is taxed.
    Furthermore, it also depends on what tax bracket you are in. The higher tax bracket; the more you should be setting aside.

    Ultimately, the contract work is subject to federal income tax, state income tax and self-employment tax.
    Luckily, you live in WA and there is no state income tax within the state.

  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    Yeah, just the self employment portion(s/med) is 15.3%, since you have to pay “both sides”.....then add on your fed tax.....both on your net.

  • Spokane, WA · Member since 2018 · 10 posts · 3 votes
    7y

    Ok. Thanks Gus for the advice!

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