September 15, 2017 at 5:45 pm #100477
I was just recently offered a position making $150,000/yr. This position would be considered self-employed, as I would be working on 100% commissions, but guaranteed $150,000/yr. I am trying to evaluate to determine if this makes sense. I currently gross $96,000 in my current job, working for a major manufacture. My monthly net take home is approx. $5500. With looking at the self-employed job, I was trying to get a feel of the SE tax and est. income tax required, then I can review the deductions for living expenses, travel, etc. This will help me see if the $150,000 is a reasonable amount considering where I am at today working.
ChrisSeptember 15, 2017 at 5:46 pm #101149
First of all, congratulations on what sounds like a great opportunity! Intuit has a neat calculator that allows you to enter a salary to calculate your estimated self employment taxes. Based on the $150,000 salary, your total estimated self employment tax would be $22,950. ($4,350 is Medicare and $18,600 is Social Security). You would also be subject to income tax which is determined by the tax bracket that you fall into.
One of the benefits of being self employed is you may be eligible to write-off expenses that you incur as a result of doing your job, provided your company does not reimburse you. For example, if you work out of your home then you may be eligible for the home office tax deduction. In addition, if you purchase office supplies and equipment for work then you may be able to deduct these items. Below, I have provided a few resources for you to check out:
Intuit Self-Employed Calculator: https://quickbooks.intuit.com/r/free-self-employment-tax-calculator-quickbooks/
QuickBooks Self-Employed Software:
The Ultimate Guide to Commissioned Based jobs:
Home Office Tax Deduction: What it is and how it works:
Good luck to you and thank you for reading!