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Thread: How much should I be setting aside for taxes

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    Member Scarletkisses's Avatar
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    Default How much should I be setting aside for taxes

    I just started dancing and I know that I will get a 1099 at the end of the year, but I would like some tax advice as to how much I need to be putting aside. I don't want to be paying in a whole bunch at the end of the year, I would rather just set it aside every night.
    So far I have only made money in cash, no funny money or Credit cards so how much of that do I document?
    I have a full time"Vanilla" job that I claim zero on...I also have $25 extra deducted each pay check
    Can I write off my house fees?
    What about my sheriff card and or business license?
    At the end of each night what % should I be setting aside of my cash...and how much of my credit/funny money made?

    I have also heard we can write off part of our make up, and tanning, hair salon. Is that true? Do I just keep reciepts?

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    Banned Melonie's Avatar
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    Default Re: How much should I be setting aside for taxes

    most of your questions are already answered at

    Also note that this coming Tuesday is the deadline for filing / paying estimated taxes on your January through March 2012 dancing earnings !

    An issue that will apply in your situation, that wasn't clearly addressed in the other thread, is the fact that your dancing earnings will not only create tax liabilities of their own, but they will also increase the tax liabilities on your 'vanilla' job income ( by kicking you into a higher tax bracket ). Thus, depending on your present 'vanilla' job income level, your dancing earnings level, etc. the 'extra' $25 per week in estimated taxes that you have withheld from your 'vanilla' job paycheck may not really be 'extra' anymore.
    Last edited by Melonie; 04-13-2012 at 12:23 PM.

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    Default Re: How much should I be setting aside for taxes

    More what I am asking is what percent of my cash made should i set aside , and how much of my credit/ funny money should i set aside so that I am not surprised when tax season comes

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    Banned Melonie's Avatar
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    Default Re: How much should I be setting aside for taxes

    More what I am asking is what percent of my cash made should i set aside , and how much of my credit/ funny money should i set aside
    As I posted earlier, the accurate answer depends on how much money you earn at your 'straight' job, how much additional money you earn from dancing, whether your are single, whether you have children, etc. A wild guess based on assumptions that your dancing earnings are around $500 a week, that your straight job income is around $500 a week, that you are single with no children, and that your present estimated tax withholding for SSI tax and income tax from your straight job paycheck is around $100 a week, etc...

    Dancing income net of allowable deductions = $20k per year
    SSI / medicare taxes due on $20k dancing income at 13.3% = $3000
    SSI / medicare taxes due on $25k straight job income at 6.7% = $1500
    federal income taxes due on $20k dancing income plus $25k straight job income at 15% = $7000
    less federal estimated taxes withheld from $25k straight job paychecks at 10% = $ - 2500
    additional taxes due 3000 + 1500 + 7000 - 2500 = $9000
    effective tax rate on dancing income alone 9000 / 25000 = 36%

    ^^^ so setting aside 36% of your dancing earnings should cover both the taxes due on that dancing income alone, plus the additional taxes due on your straight job income because your actual total earnings are now far higher than your straight job employer's payroll dep't 'thinks' they are. Admittedly there are other factors ( like lost tax credit eligibility, the standard deduction versus itemized deductions etc. ) that can change the actual tax rate. But even under the best of conditions you're probably still at 30% given the fact that the employer withholding from your straight job paychecks isn't sufficient to cover the actual taxes due because dancing income kicks you into the 15% + a little bit of the 25% federal tax bracket ( with employee SSI and medicare taxes on top of that )


    so that I am not surprised when tax season comes
    Where independent contractor dancers are concerned, 'tax season' comes every 13 weeks. Because there is no 'employer' withholding money from paychecks and making estimated tax payments on behalf of employees on a regular basis, independent contractors must withhold money from their own earnings and make estimated tax payments to the IRS themselves. But they only need to do this 4 times per year. As I said earlier, the independent contractor estimated tax payment on 2012 jan-feb-march income is due next tuesday, the same day as 2011 full year tax returns ! Since you just started dancing, you can pass on this estimated tax payment. But the next independent contractor estimated tax payment will be due on June 15th, at which time you should be thinking about sending in to the IRS 30% of the total amount of dancing income you have earned so far this year.
    Last edited by Melonie; 04-14-2012 at 01:37 AM.

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