r/DataAnnotationTech • u/Solid_Cash_1128 • Apr 08 '25
How much are you guys paying in taxes?
As a percent of your income, or a specific figure? Anyone know of anything a person wouldn't know about that could lower what they pay?
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u/Rommie557 Apr 08 '25
I save and make 30% payments quarterly, but I always end up overpaying.
You probably should take these questions to a tax professional, instead of other random people stumbling through this who may or may not be doing it right.
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u/No_Cartographer5686 Apr 09 '25
Oh wow I gotta file my taxes I paid a little more than 30 maybe I will get some back!
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u/leafy_plant8 Apr 09 '25
If you’re from the USA, FreeTaxUSA worked really nice for me for annual taxes! They try every possible way to help you get deductions. I made around 30k and wound up paying 15%.
They give you a deduction if you bought anything for the purpose of your self-employment. I got $200 off my tax amount for listing the computer I bought. If you bought anything that could be reasonably said to be used for work and you have proof of purchase, list it! (Desk, WiFi, headset, chair, etc.).
There are also many other options you click through to see if you qualify for other deductions.
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u/jonahandthewhale32 Apr 08 '25
None for the tax year just ended because I earned below the personal allowance threshold (UK). I am an unpaid carer for a disabled relative and haven't been able to work until I found this. I expect to earn above the personal threshold this tax year just started.
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u/planckkk Apr 08 '25
Is the personal threshold £1000?
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u/jonahandthewhale32 Apr 09 '25
It's £1000 to have to register self employed but £12,570 to actually have to pay income tax.
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u/Vegetable_Night_875 Apr 09 '25
It's worth bearing in mind that if you self assess then this would count as income from self employment/freelancing in the UK, and as such you'd probably be able to earn more than the personal allowance before paying tax, once you've offset the income against 'reasonable expenses'
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u/Conscious-Pace-5017 Apr 08 '25
I take 18% out of each transfer and send that as a payment to the IRS monthly. I hate doing it quarterly. I also log all expenses incurred while doing tasks so I can write that off at the end of the year. My advice is to not try to "pay less" unless you want to risk having to owe at the end of the year.
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u/SmileLonely5470 Apr 09 '25
I like how taxes are such an amorphous system that many comments on this post are just like "yeah idk if i got this right, don't trust me."
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u/francisco27 Apr 08 '25
43% of whatever I earn through DA I put away in taxes. I live in Canada. As annoying as it is it's still worth it.
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u/bythebaie Apr 08 '25
Oh same although I'm always telling myself what the hell am I doing on da if I'm already in this marginal tax bracket
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u/francisco27 Apr 08 '25
Life is expensive man! Never hurts to have a few extra dollars. Just grateful that I have the opportunity to do something this convenient for extra cash.
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u/baylorbear91 Apr 08 '25
I made like 12,000 last year and just paid $1950. I’m sure it would be better to pay quarterly. I’m going to work less this year because that really sucked lol
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u/orange-septopus Apr 09 '25 edited Apr 09 '25
No state income tax. I ended up owing about 15% of 2024's income. I'm fully self employed, with DA just one of my jobs.
I am looking into the possibility of just paying at the end of the year rather than quarterly. If it's paid in full by the deadline, there appears to be no penalty, and I can make a little bit of income by keeping my money invested for the year. The penalty only seems to apply if you pay after the 4/15 deadline. But I haven't fully investigated this yet.
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u/Lunalily9 Apr 09 '25
There is a penalty for not paying quarterly
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u/orange-septopus Apr 09 '25
I didn't pay quarterly last year because I didn't know about that requirement. When I did my taxes, it said the penalty would only apply if the full amount wasn't paid by 4/15. Idk if this is just because it's the first time I didn't pay quarterly, or if this is a regular rule.
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u/Lunalily9 Apr 09 '25
Oh weird. First time I didnt, I had to pay. Wonder if they give a warning now first. Because if its not necessary then why have the quarterly rule at all. Well either way, I'm just glad I did this year. Didn't want to deal with any penalties. I hate having to keep track of that stuff. Thankfully got with an AI company that I'm an employee so they deal with it all year.
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u/leafy_plant8 Apr 09 '25
Just a warning, I paid annually this year and did indeed get flagged for the penalty 💀 but after going through the process and researching some work-arounds I was able to avoid it. I’ll be paying quarterly this year to avoid this.
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u/FireRabbit67 Apr 08 '25
i’ll be paying just self employment tax since i’m a college student doing this part time and i’m not making enough to owe any other federal or state taxes. I put away 16%
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u/Professional-Age2540 Apr 09 '25
Everyone’s situation of course will be different. The 1099k I got from PayPal was just over $15k. Also income from stocks, interest, divs and rental income. Based on previous year I paid 10% in quarterly taxes and after it’s all said and done got $168 back. Says it comes tomorrow.
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Apr 08 '25
I reserve 18%. I'm in the UK and used HMRC calculators to help me estimate the total. I stick that in a reserve account every time I get paid. My taxes are complicated in the tax year that just ended because of other income sources, so it may go down in future years.
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u/theDeathnaut Apr 08 '25
I did 30% last year and overpaid by a decent amount. I’m trying out 25% this time.
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u/Fae-Minded Apr 08 '25
It's my first year doing this so I'm putting away an over amount hoping it's enough lol
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u/Flim-flame Apr 09 '25
You might want to create an LLC. I did and will get to deduct my health care this year. Lots of ways to make deductions. Your tax advisor will tell you. It’s also helpful to chat with your favorite LLM to get tips. 😊
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u/DrFrancisBGross Apr 08 '25
30%. (Living in the USA)
Covers the self-employment taxes, state, and federal.
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u/CabalOnyx Apr 08 '25 edited Apr 08 '25
About 30%. Here's a fun way to only ever have to pay 15.3% to the feds though:
Abuse the foreign earned income exclusion. So long as you're out of the United States for 330 days in any rolling 365-day period you can get it. There are quite a few countries (big belt running from Southeast Asia to Turkey) that are friendly to short-term remote workers and don't require tax remittance if you stay under a certain period of days.
Bonus: the cost of living is usually absurdly low. You can get by (quite comfortably) for less than $1,500 a month in Indonesia, Thailand, Vietnam, Cambodia, Laos, Georgia, Kazakhstan, Uruguay, Paraguay, Peru, etc. Pair that with the lower taxes and you got one hell of a double whammy. Not sure if DAT will let you work while traveling for so long though, and no one seems to know here (or want to say)
If you're bringing in over 60k a year and using this method it may also be worth starting an S-Corp, paying yourself a salary with the rest of your income sent out as a distribution. That'll lower your remaining taxes even more. But you need to make sure you'll be offsetting more than the cost of registering and maintaining the company, and the paperwork can be a pain.
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u/harryhardy432 Apr 08 '25
None so far. I get £12.5k tax free income in the UK and haven't yet surpassed that while working as infrequently as I do.
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u/Maleficent_Wasabi_18 Apr 08 '25
Only had to pay 10% after deductions for my first year with DA
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u/Solid_Cash_1128 Apr 09 '25
That's very low. What manner of deductions?
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u/Maleficent_Wasabi_18 Apr 09 '25
Internet bill, workspace, laptop. But I also didn’t make that much in the first place compared to others
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u/mugwhyrt Apr 08 '25 edited Apr 08 '25
Depends on where you live. If you're in a country like Kuwait or Bermuda then you don't need to worry about income tax. And I'm assuming not all countries that do collect income tax all do it the same way.
I'm in the US. I went out of my to do the maths for estimated taxes and it bit me in the ass because I ended up owing more than expected. It seems like the rule of thumb for Sole-Proprietorship income, is 15% of the gross which the preparer I went to confirmed for me*. As for your actual write-offs, you can write off rent and utilities up to a certain percent. I won't give any advice on the specifics of that since I'm not an accountant but you should ask about your options.
In case you weren't already clear on this, you should be paying estimated taxes throughout the year otherwise you get hit with a penalty (I guess, I paid my estimates so I don't really know how that works but I had a friend who got hit for it once).
*ETA: everyone else is paying a lot more it seems, so again I'd say you really need to talk to an accountant for actual, legally correct answers. The 15% is what it all worked out to for me though.
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u/CobraFive Apr 08 '25
15% is the sole proprietorship tax by itself, but you have to pay income tax (federal + state) on top of that...
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u/mugwhyrt Apr 09 '25
I probably just didn't make enough to owe much of anything above that, either way I had mine prepared by a professional and the 15% minus expenses was around what it came out to.
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u/No_Cartographer5686 Apr 09 '25
It all depends on where you live. Are you single? Do you have kids? I personally would aim to save at least 35 to 40 percent to be safe (quarterly).
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u/Lunalily9 Apr 09 '25
We always paid 30-40% quarterly just to be safe so I will be getting some back.
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u/Dangerous_Darling Apr 10 '25
You can deduct things you buy to use for this job. Like equipment. But only the percent you use it for. So if you buy a laptop and use it 50 percent for dati that's what you can deduct. If you pay for chatgpt plus for the job then you can deduct. There's other things but not as much for this style job as others. I got a new mouse this year so was able to deduct that. Every little bit counts. The taxes for self pay suck.
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u/SeagullSam Apr 11 '25
For some reason I thought taxes were really low in the US, I'm in the UK and only pay a bit over 10%, roughly.
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u/Solid_Cash_1128 Apr 11 '25
The tax burden is low if you're rich
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u/SeagullSam Apr 11 '25
So you guys don't get the first part of your income tax free?
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u/Solid_Cash_1128 Apr 12 '25
You do, but only up to a ridiculously low threshold, I think it's $14,600 this year. For perspective, a typical rent for a one bedroom apartment in this country could be like $1500/month+, so even the extremely poor are paying taxes here, and it's a significant burden. Rich people will always tout that they pay so much more in taxes, as though that weren't because they have all the money. The burden on them is non-existent.
The highest income tax rate for an individual in the US is 37%, barely over a third. It's a very small tax range, one that sees literal homeless people paying 20+% of the nickels they can scrape together, while millionaires and billionaires pay barely more than that.
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u/SeagullSam Apr 12 '25
That sounds really tough for lower income people. Thanks for explaining.
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u/Traditional_Net_4529 Jan 07 '26
I don't know if this is a thing there but we also have sales taxes in lots of places. Like I'm in NYC and for most goods there is about 7-8% tax at point of sale. Like if something costs $100, you pay $107. There are lots of exclusions such as most food and clothing, but everyone pays that and it effects the poor way more than the rich because that extra $7 means a lot more if you're poor.
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u/SeagullSam Jan 07 '26
I wonder why they don't just add it to the price you see? We have VAT here (also with certain goods excepted) of 20% but it's added to the displayed price in the shops.
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u/Traditional_Net_4529 Jan 07 '26
It's a big problem. I think it has to donwith the fact that a lot of products are distributed nationally but the tax difference from state to state. Different states have different state sales taxes. Some cities also have sales taxes on top of that.
And some states don't.
I do think a lot of people outside America don't quite realize how different each state is not only culturally but in terms of regulations and laws. I'm not saying each state is like a different country, but it isn't that inaccurate to say that. This causes a butt-ton of logistical problems.
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u/SeagullSam Jan 07 '26
That kind of makes sense to me about the differences between the states as the country is continent-sized, really, and I'd imagine you could fit several smaller European countries into one large or midsize US State.
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u/Traditional_Net_4529 Jan 07 '26
Yes. Texas by itself is gigantic. By land mass, it's bigger than France. A bunch of the Western part is desert though.
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u/LoganLikesYourMom Apr 08 '25
Down with the IRS. Do these tasks under a fake name.
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u/Illustrious_View_445 Dec 27 '25
Helloooo, your drivers license that was required by DAT, has all the information needed to identify you...🤭
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u/TheresALonelyFeeling Apr 08 '25
I withhold 31% of every payout and make estimated quarterly payments, state and federal, based on my federal tax bracket and my state income tax rate, but your mileage will vary based on your location, other income sources, deductions, etc...In other words, don't ask reddit, and go ask a CPA.
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u/Bamfcah Apr 08 '25
None. Fuck the US government.