[Hidden-tech] Calculating soc sec

[W. Cody Anderson]

Mary,

Assuming you're in the midst of preparing your taxes, tax software such as
TurboTax will handle "self employment tax".  This is comprised of two
things:

1 - the Medicare and Social Security taxes (7.65% of gross pay, I believe)
that "payrolled" people have withheld from their paychecks.
2 - the Medicare and Social Security MATCHING contributions that would also
be paid by the person's employer if they were a W-2 employee.

Also, there is a gross pay limit ($90,000?), over which you need not pay SS
contributions.  Medicare has no such limit, so you pay those forever.

My company, Evenerable Group, Ltd., is an S corporation.  To avoid IRS
audits, I've been advised by my accountant that I should pay myself a
paycheck and get a W-2 at the end of the year.  I also use QuickBooks
payroll, which handles figuring out all the tax calculations, etc.  I send
my taxes withheld to the IRS on a monthly basis. 

My recommendation for getting 2005 behind you: get thee to TurboTax or a tax
preparer.  For 2006, I'd also consider paying yourself a regular paycheck,
if only to keep yourself honest and out of the IRS Penalty Box.

Best,
Cody


-----Original Message-----
From: hidden-discuss-bounces at lists.hidden-tech.net
[mailto:hidden-discuss-bounces at lists.hidden-tech.net] On Behalf Of Mary
Malmros
Sent: Wednesday, March 08, 2006 7:49 PM
To: Hidden Tech
Subject: [Hidden-tech] Calculating soc sec

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Hey folks,

Does anyone have an accurate formula for calculating social security 
contributions for a self-employed/1099 type person?  I stumbled my way 
through the IRS site, but I'm not 100% sure I got it right.

TIA,

-- 
Mary Malmros						malmros at verizon.net
      Some days you're the windshield, other days you're the bug.



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