How much should I set aside for taxes?

I babysit and the parents want to cliam the child care credit next year. This means that I will have to claim the income. This is fine but, I need to know an approx. amount that I should set aside for taxes next year. She will be paying me about $500 a month if that helps. Thanks!!

How much should I set aside for taxes?

Nothing for federal taxes. Anything income under the standard deductions of $8450 and you wont pay any tax.

$500 a month is only $6,000 a year.

You might have to pay state taxes, it depends on your state ceiling. But state shouldnt be more than 8-10 percent

How much should I set aside for taxes?

You%26#039;ll need to make quarterly estimated payments to the IRS using Form 1040ES. If this is your only income and you%26#039;re single, the only tax bite will be the 15.3% Self Employment tax.

If you have other income or if you%26#039;re married filing jointly, you%26#039;ll need to set aside and pay in between 10% and 35% for income taxes depending upon your tax bracket.

If you don%26#039;t make the required quarterly estimated payments, you may be subject to penalties and interest for underpayment of estimated taxes.

How much should I set aside for taxes?

I would set aside 20% to 25%. I would put the money in an interest bearing account. Then at the end of the year I would see how much of what I saved went to pay taxes and reevaluate the amount I%26#039;m setting aside.

How much should I set aside for taxes?

$500 per month = $6000 per year. The standard deduction for singles is $5150 for 2006. That leaves $850 taxable income. You probably can%26#039;t claim the $3,300 personal exemption because you are most likely still a dependent of your parents. Tax on $850 would be 10% or $85. I believe you would also have to pay self-employment taxes at 15.3% That comes to $918. You total, by my math is $1003. You should make quarterly estimated tax payments if expect your tax to be $1000 or more. If you can find at least $30 worth of expenses related to babysitting, that would reduce your tax by enough that you don%26#039;t need to make estimated payments.

How much should I set aside for taxes?

It depends on what bracket you%26#039;re already in due to your husband%26#039;s income, but if he makes under about $45,000, set aside around 1/3 of what you earn from babysitting. If he makes more than that, you%26#039;d be safer setting aside around 40%.

You will have to make quarterly estimated payments to send those taxes in, you don%26#039;t just wait until the end of the year.