anyone here that does 1099 side gigs + current job (w2) ?

Accenture wiskfhwh
Jun 9 18 Comments

what's your tc on current job? and your 1099 hourly rate for side gigs?

w2 is yearly tax. how do you handle the taxes for 1099?

nyc 175K base here + doing 80USD/hour 1099
i work remotely on both and got my GC

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TOP 18 Comments
  • Google Mr. Glass
    Limited Partner in other businesses
    Jun 9 4
    • Accenture wiskfhwh
      OP
      google allows this? or you just keep it secret?
      Jun 9
    • Google Mr. Glass
      Google is not your mommy. The US constitution allows this. You’re free in this country. You just can’t work for someone else and get paid a salary, or compete against google. Being a limited partner is like buying stocks, except its private
      Jun 10
    • Accenture wiskfhwh
      OP
      agree, thanks for this

      in my case the companies i do side gigs are the smaller ones that accenture would not touch

      at the end of the day i'm just doing this for the extra income
      Jun 10
    • Google Mr. Glass
      👍
      Jun 10
  • Clever Devices / Eng 72offsuit
    I have found that the easiest solution is to withhold extra from my W2 paycheck to cover approximate tax from 1099.

    Note that on 1099, in addition to normal tax bracket you will also have to pay ~15.9% self employment tax which covers SS, Medicare, etc. so you will owe ~40% of your taxable 1099 income.

    W2 TC 135k (east coast non FANG)
    1099 income: 60-80k

    I get paid weekly for W2, so I withhold an additional 400 fed, 100 state for taxes. If I bill within the 60-80k range I still end up getting a modest return when I file
    Jun 10 11
    • Clever Devices / Eng 72offsuit
      No extra forms and no worry about a separate bill, plus the benefit of actually getting a return at the end of the year
      Jun 10
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      My approach is different.

      I get to use that money legally till the last week of the year. Even if I put it in a high yield bond it’s money in my pocket.

      I write bills all year. To me a 5 line form is not a big deal. Especially if it generates a few thousand dollars in interest yield for the year.

      I don’t consider a tax refund a good thing. I see it as a free loan to Uncle Sam. And my dear Uncle never gives me such loans back.

      However, your approach works well for you so why change it.

      Cheers.
      Jun 10
    • Clever Devices / Eng 72offsuit
      That’s a good point about essentially loaning to the gov... I primarily had done it for convenience and not having to worry about coming up with x dollars at tax day, but seems like it would be smarter to maybe drop that in etfs or something where it can work for me
      Jun 10
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      I put it in short term high yield bonds. So regardless of what happens to the market (e.g last December) I still have the entire principal available to pay Aunt IRiS.

      ‘Cos you know she doesn’t play around 😀

      As you know, bond ETFs fluctuate especially when there is uncertainty in Fed policy.

      Cheers
      Jun 10
    • Accenture wiskfhwh
      OP
      curious, what are the short term high yield bonds do you use?
      Jun 10
    • Accenture wiskfhwh
      OP
      i'm new to 1099. so you get SS, medicare tax on both your W2 and 1099?!? that's double taxed
      Jun 10
    • Accenture wiskfhwh
      OP
      and btw it sounds like it's better to create a LLC? is this what you did "72offsuit" ?

      with LLC am I more flexible to declare company expenses vs single prop?
      Jun 10
    • Accenture wiskfhwh
      OP
      and what is the 1040-ES?

      sorry guys i'm really new to these jargons
      Jun 10
    • New / Other
      DuQvV7y

      New Other

      BIO
      Did stuff. Hustled hard. Retired
      DuQvV7ymore
      1. Bonds are not like stocks. I look for what matures in November. What I like the yield of. What rating I can live with. And what’s available at a discount. They are not like equities so you can’t always determine what is available.

      2. No, it’s not double taxation. It’s single taxation on 2 different streams of income.

      3. You should certainly consider an LLC (for risk) and an S-Corp for tax reporting. It opens a whole new world of SEP-IRA limits to you.

      4. 1040-ES is estimated taxes you pay before the year closes to avoid an underpayment penalty.
      Jun 10
    • Clever Devices / Eng 72offsuit
      On your W2, you Pay half of the SS and med and your employer pays half. On your 1099, you Pay all of it. You legit only expect to see 55% of your 1099 income.

      Regarding LLC, I did not do that. You can, but it doesn’t really give you much advantage. You can deduct expenses the same as an independent contractor.
      Jun 10
  • New / Other
    DuQvV7y

    New Other

    BIO
    Did stuff. Hustled hard. Retired
    DuQvV7ymore
    1099 is just a reporting of what you were paid to the IRS.

    You get to decide how to report this to the IRS by virtue of the company you set up for the 1099 payments.

    If the 1099 is in your name, it’s a sole proprietorship and works like a W2 with slightly higher taxes (cos of FICA).

    If it’s in a company name, the fax filing rules are based on the company type
    Jun 10 0

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