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 Question about 1099 employment 
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Post Question about 1099 employment
I just got a job and unfortunately it's a 1099 gig. I can deal with it, I just plan on opening a separate account and having the proper percentage of the funds automatically put into that account every time I make a deposit.

My question though is that while I know I have to set aside for state and federal income tax, what about social security and such? Do I have to set that aside for the IRS (or SSA or whoever) as well? Or is that automatically included in the income tax I set aside for the IRS?

Also, how often and I required to make the payments to the IRS? The guy told me usually at the end of the year but I've read some things that say it should be quarterly.

EDIT:

One other thing, I know I'll fit into the 15% bracket for federally taxes and that Michigan has a flat rate that I believe is like 4.35% or something like that. Now I also know that Michigan does allow for local municipalities to levy their own income taxes (for example I know Detroit has city income tax). I highly doubt my city does but how would I find out for sure? Would that info be on the cities website? Or would I have to call someone?

As far as the mathematics goes I'm fully capable of doing my own bookkeeping through the year and then just hiring a professional during tax time to ensure I claim any exemptions that may be applicable but I just need to make sure I have all the correct numbers. I know the federal and state numbers (not exact of the top of my head but I know where to get everything I need for that when I set up the accounts) just need to make sure on any local taxes that may be applicable and figure out the whole pesky social security thing.


Last edited by Rob_Shadows on February 28th, 2012, 11:50 pm, edited 1 time in total.



February 28th, 2012, 11:38 pm
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Post Re: Question about 1099 employment
You have to make quarterly estimates. Safe bet is usually 25-30% each paycheck, but someone in your local area would know more what the taxes there are like. Btw, aren't you still unable to get unemployement if they lay you off from a 1099 gig? Can't remember if that changed or not.


February 28th, 2012, 11:47 pm
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Post Re: Question about 1099 employment
njroar wrote:
You have to make quarterly estimates. Safe bet is usually 25-30% each paycheck, but someone in your local area would know more what the taxes there are like. Btw, aren't you still unable to get unemployement if they lay you off from a 1099 gig? Can't remember if that changed or not.


As far as I know if you get laid off from any 1099 job your screwed. It's not a high paying job or anything like that anyway it's a simple shuttling gig shuttling F-150s from line to lot or something like that, don't start til Thursday. I'm not thrilled or anything but it's better than no job at all and will suffice until I get something better. At worst hopefully I'll be able to save up enough money to get back in school and get back to work on my degree.

Finally figured out what I really want to do as far as making a career for myself goes and I can't get back into school right now to do it because my grades slipped when I started having panic attacks and my financial aid was suspended until I manually pay a semester...need to get some money and get back going with that since I have my panic disorder under control, I'm not getting any younger and I have fairly ambitious goals (investment banking). Already 25, even if I get back in school by this fall I'll already be at least 28 or so by the time I get my bachelors and start trying to land a gig as an analyst. If I remember correctly it's usually 2 years as an analyst before most go back to get the MBA and start trying to get the associate gig...by that time I'll be at least 32 and that's if everything went perfectly, more realistically it could be anywhere between 32 and 35 so yeah...need to get the ball rolling here soon if I want any chance at an early retirement :P


February 29th, 2012, 12:00 am
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Post Re: Question about 1099 employment
I did a 1099 job a while back. My piece of advice is this: save receipts for Everything. On a 1099 you want to itemize your return. Cloths, food, gas, even entertainment can be deducted as long as you can call it a business meeting.

As far as you not being an investment guru until you 35....don't fret bro. Have you ever seen a 20 year old investment specialist? If you have would you trust him with your money? Being older is an advantage in that field. Age brings wisdom which is vital to investment. So relax bro. Have a beer and know that all is well with the world.

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February 29th, 2012, 8:48 am
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Post Re: Question about 1099 employment
Rob_Shadows wrote:
Finally figured out what I really want to do as far as making a career for myself goes and I can't get back into school right now to do it because my grades slipped when I started having panic attacks and my financial aid was suspended until I manually pay a semester...need to get some money and get back going with that since I have my panic disorder under control, I'm not getting any younger and I have fairly ambitious goals (investment banking). Already 25, even if I get back in school by this fall I'll already be at least 28 or so by the time I get my bachelors and start trying to land a gig as an analyst. If I remember correctly it's usually 2 years as an analyst before most go back to get the MBA and start trying to get the associate gig...by that time I'll be at least 32 and that's if everything went perfectly, more realistically it could be anywhere between 32 and 35 so yeah...need to get the ball rolling here soon if I want any chance at an early retirement :P


How much research have you done on investment banking? I thought I wanted to do it too, but after I did my research, I decided it wasn't worth it... I went into accounting instead and so far I love it... Really look into it though... Your work-life balance is pretty crappy...


February 29th, 2012, 6:08 pm
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Post Re: Question about 1099 employment
Murtyle wrote:
Rob_Shadows wrote:
Finally figured out what I really want to do as far as making a career for myself goes and I can't get back into school right now to do it because my grades slipped when I started having panic attacks and my financial aid was suspended until I manually pay a semester...need to get some money and get back going with that since I have my panic disorder under control, I'm not getting any younger and I have fairly ambitious goals (investment banking). Already 25, even if I get back in school by this fall I'll already be at least 28 or so by the time I get my bachelors and start trying to land a gig as an analyst. If I remember correctly it's usually 2 years as an analyst before most go back to get the MBA and start trying to get the associate gig...by that time I'll be at least 32 and that's if everything went perfectly, more realistically it could be anywhere between 32 and 35 so yeah...need to get the ball rolling here soon if I want any chance at an early retirement :P


How much research have you done on investment banking? I thought I wanted to do it too, but after I did my research, I decided it wasn't worth it... I went into accounting instead and so far I love it... Really look into it though... Your work-life balance is pretty crappy...


This is excellent advice. This is one of those jobs that sounds great and you make a lot of money, but there is a downside. I too was once an "ambitious" in my 20's. When I started my first job, I told my co-works rather boldly I would be a manager in 5 years and a VP before 30 which was unheard of. I worked my badonkadonk off with that goal in mind. I got my MBA and started my mgt job in Dallas on the day of my 5 year anniversary. I was then promoted to VP at 28 - mission accomplished.

Only thing was, I realized I hated the VP job. I was chasing a title without thinking about what I would have to be doing every day. I had no life, there would be days when I wouldn't go home (and smell pretty ripe in the morning). I was burned out within two years and took my career in a different direction.

If you really want to be an investment banker then go for it and good luck! In my case, even though I ended up hating the job the journey there was very educational...

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February 29th, 2012, 7:18 pm
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Post Re: Question about 1099 employment
I'm not going to lie and say the money isn't a big part of the allure that has me wanting to go in that direction but I think there's also some part of me that just wants to prove I can do it. No one that knows me would EVER expect me to land any kind of job with those kind of salary numbers, nor would they ever expect to see me putting in 80-100 hour work weeks. That coupled with the potential early retirement options if I was smart with my money (probably be the hardest part of all, lol) really makes me want to go for it. I've seen so many people work their asses off into their 60s just to retire with just enough to get by and die a few years later...I don't want that, I want to be able to actually enjoy life in my later years and really reap the rewards of my career and the money I made. And I can't really find anything else that offers THAT much earning potential, especially given you make pretty damn good money right out of college. (and I've spent more time on bls.gov than I'd ever care to admit, lol)


March 1st, 2012, 2:34 am
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Post Re: Question about 1099 employment
Well good luck Rob. I've found in life that there is a bit of a trade off between time and money. I'm at the point in my life where time is more important, but that is somewhat due to focusing on money when I was younger.

Go prove them all wrong kid!

BTW - why don't you start a Lionbacker Fund we can all invest in! \:D/

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March 1st, 2012, 10:35 am
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Joined: April 16th, 2005, 3:23 pm
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Post Re: Question about 1099 employment
Rob_Shadows wrote:
I'm not going to lie and say the money isn't a big part of the allure that has me wanting to go in that direction but I think there's also some part of me that just wants to prove I can do it. No one that knows me would EVER expect me to land any kind of job with those kind of salary numbers, nor would they ever expect to see me putting in 80-100 hour work weeks. That coupled with the potential early retirement options if I was smart with my money (probably be the hardest part of all, lol) really makes me want to go for it. I've seen so many people work their asses off into their 60s just to retire with just enough to get by and die a few years later...I don't want that, I want to be able to actually enjoy life in my later years and really reap the rewards of my career and the money I made. And I can't really find anything else that offers THAT much earning potential, especially given you make pretty damn good money right out of college. (and I've spent more time on bls.gov than I'd ever care to admit, lol)


I was in your shoes a few years ago... You sound EXACTLY like I did... My accounting professor is the one who talked me out of going straight for IB... He told me a few things that stuck with me, 1) If you get an accounting degree, you're pretty much guaranteed a job even in this environment (UF's Fisher School of Accounting had 100% placement last year)... Finance is going to be tougher to break into and more volatile... 2) The best analysts are the ones who were accountants... Work on an audit staff for a few years and you'll be able to smell misleading financials... 3) IBing doesn't have a whole lot of exit opportunities outside of the finance field... 4) If I do decide to try and break into it, having a B.A. and M.A. in Accounting to go with my C.P.A. certification AND an M.B.A. in finance with the C.F.A. certification, my possibilities are endless...

Something to think about... Oh and I don't know if you've seen these yet, but here are a few places that I went to and found some helpful info...

This guy was an investment banker (and hated it), but he quit and now he runs this site trying to help people break into the industry. There's tons of info, blogs and personal stories here:
http://www.mergersandinquisitions.com/

There's a forum here where you can ask specific questions about different sectors in finance...
http://www.wallstreetoasis.com/

This place isn't IB specific, but it has a lot of information on different higher level business careers..
http://www.vault.com/wps/portal/usa

Good luck dude... Maybe our paths will cross one day...


March 1st, 2012, 7:37 pm
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Post Re: Question about 1099 employment
I was originally thinking IB (M&A) but lately I've been thinking about trying to get in as a trader instead. Better hours from what I understand, bit more structured as far as what you do daily and still good money (in fact even higher earning potential *if* your good at it). Anyone know anything about that route? Should I still major in finance? Or would there be a path more specific for that career choice?


March 2nd, 2012, 1:51 am
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Post Re: Question about 1099 employment
http://www.nytimes.com/2012/03/14/opini ... sachs.html

Interesting article about someone leaving Goldman Sachs

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March 14th, 2012, 4:24 pm
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Post Re: Question about 1099 employment
What university are you going to? I'm sure you know this, but if it's a university in this state that isn't Michigan or Michigan State it's going to be very difficult to become an IBer. Even then, you'd probably have to come out of Michigan's Business school (which is hard to get into in the first place even if you're already a student there) or do something even more prestigious at State. Good luck.


March 19th, 2012, 12:49 am
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