How to Estimate Taxes on a 1099-Misc
You can prepare your own income-tax return every April or can pay a professional tax preparer to do it. If you're self-employed as a contractor or as a freelancer you may receive a form 1099-Misc at the beginning of the year instead of a W-2. You can estimate taxes on a 1099-Misc form by first determining the self-employment tax rate for the previous year.
Instructions
Examine the 1099-Misc form you have received for the previous tax year. Income on the form can be found in many boxes but the most common are Box 1, Box 2, and Box 7. Box 1 is for rental income, Box 2 is for any royalties received for the use of property and Box 7 is for non employee compensation.
IRS Tax Form 2290
Add the amounts from all Form 1099-Misc Box 7 with a calculator. Make a note of the total on a piece or paper. This is the amount of income which you will owe self-employment tax plus income tax.
Determine the amount of self-employment tax that applies for the previous tax year. Self-employment tax consists of Social Security and Medicare. In 2012, the Social Security tax was 10.4 percent, and the Medicare tax was 2.9 percent. Social Security tax is due on the first $110,100 you earned in 2012.
Free Federal Tax Preparation
Multiple the total from step 2 by .104 to estimate the amount of Social Security tax and .029 to estimate the Medicare tax. Alternatively, you can use an online calculator to estimate the amount of tax that you will owe (see Resources).
Estimate the amount of income tax you will owe by using the withholding calculator that is provided by the Internal Revenue Service (IRS) (see Resources). This calculator allows you to input deductions and any federal income tax that you have already paid.
Free Income Tax Calculator
Add the income tax and the self-employment tax together to determine an estimate of your total federal taxes due on your independent contractor income.
Mississippi Tax Extension forms
You can prepare your own income-tax return every April or can pay a professional tax preparer to do it. If you're self-employed as a contractor or as a freelancer you may receive a form 1099-Misc at the beginning of the year instead of a W-2. You can estimate taxes on a 1099-Misc form by first determining the self-employment tax rate for the previous year.
Instructions
Examine the 1099-Misc form you have received for the previous tax year. Income on the form can be found in many boxes but the most common are Box 1, Box 2, and Box 7. Box 1 is for rental income, Box 2 is for any royalties received for the use of property and Box 7 is for non employee compensation.
IRS Tax Form 2290
Add the amounts from all Form 1099-Misc Box 7 with a calculator. Make a note of the total on a piece or paper. This is the amount of income which you will owe self-employment tax plus income tax.
Determine the amount of self-employment tax that applies for the previous tax year. Self-employment tax consists of Social Security and Medicare. In 2012, the Social Security tax was 10.4 percent, and the Medicare tax was 2.9 percent. Social Security tax is due on the first $110,100 you earned in 2012.
Free Federal Tax Preparation
Multiple the total from step 2 by .104 to estimate the amount of Social Security tax and .029 to estimate the Medicare tax. Alternatively, you can use an online calculator to estimate the amount of tax that you will owe (see Resources).
Estimate the amount of income tax you will owe by using the withholding calculator that is provided by the Internal Revenue Service (IRS) (see Resources). This calculator allows you to input deductions and any federal income tax that you have already paid.
Free Income Tax Calculator
Add the income tax and the self-employment tax together to determine an estimate of your total federal taxes due on your independent contractor income.
Mississippi Tax Extension forms