Doing Pat's taxes

[BudDickman]

I was doing my own taxes today and I decided to punch some numbers into the spreadsheet that I use to validate whatever TurboTax says.

It turns out that there is a grain of truth to Pat's claim that he pays around 35% in taxes, because self-employed people actually pay double what employees pay in social security and Medicare tax. The untrue part is the premise that Pat makes any money at all.

Anyway, here are various scenarios that show what self-employed people in Wisconsin would pay in income tax and what their effective tax rates would be.

Total income	Taxable income	Federal taxes	SS taxes	Medicare taxes	State taxes	Total taxes	Effective tax rate
$10,000	$0	$0	$1,240	$290	$0	$1,530	15.30%
$25,000	$12,600	$1,314	$3,100	$725	$451	$5,591	22.36%
$50,000	$37,600	$4,314	$6,200	$1,450	$1,701	$13,665	27.33%
$75,000	$62,600	$9,562	$9,300	$2,175	$3,026	$24,063	32.08%
$100,000	$87,600	$15,103	$12,400	$2,900	$4,351	$34,754	34.75%

It appears that fat Pat actually went through the trouble to figure out what a self-employed six figures earner would pay in taxes and what their effective tax rate would be. Of course, his effective tax rate is actually less than 15% since he makes four figures and not six.

 

[guest]

Use freetaxusa, it beats the shit out of TurboTax

 

[BudDickman]

Use freetaxusa, it beats the shit out of TurboTax

Does it handle all the 1099 forms, i.e. 1099-DIV, 1099-R, 1099-INT? I would just do my own taxes without bothering with any service if my taxes were simple and nothing ever changed from year to year, but there is always some tax break that TurboTax finds that I wasn't aware that ends up saving me enough money to be worth it.

 

[EraGodless]

I was doing my own taxes today and I decided to punch some numbers into the spreadsheet that I use to validate whatever TurboTax says.

It turns out that there is a grain of truth to Pat's claim that he pays around 35% in taxes, because self-employed people actually pay double what employees pay in social security and Medicare tax. The untrue part is the premise that Pat makes any money at all.

Anyway, here are various scenarios that show what self-employed people in Wisconsin would pay in income tax and what their effective tax rates would be.

Total income	Taxable income	Federal taxes	SS taxes	Medicare taxes	State taxes	Total taxes	Effective tax rate
$10,000	$0	$0	$1,240	$290	$0	$1,530	15.30%
$25,000	$12,600	$1,314	$3,100	$725	$451	$5,591	22.36%
$50,000	$37,600	$4,314	$6,200	$1,450	$1,701	$13,665	27.33%
$75,000	$62,600	$9,562	$9,300	$2,175	$3,026	$24,063	32.08%
$100,000	$87,600	$15,103	$12,400	$2,900	$4,351	$34,754	34.75%

It appears that fat Pat actually went through the trouble to figure out what a self-employed six figures earner would pay in taxes and what their effective tax rate would be. Of course, his effective tax rate is actually less than 15% since he makes four figures and not six.

He said he paid something closer to 50%-60% in taxes.

 

[guest]

Does it handle all the 1099 forms, i.e. 1099-DIV, 1099-R, 1099-INT? I would just do my own taxes without bothering with any service if my taxes were simple and nothing ever changed from year to year, but there is always some tax break that TurboTax finds that I wasn't aware that ends up saving me enough money to be worth it.

Yes it does. It’s way cheaper too and there’s always promo codes around to make it cheaper.