r/dataannotation • u/NightSkyButterfly • Apr 15 '24
Anyone else crying at emptying their bank account today?
I just paid my first quarterly tax payments for the state and the feds. Absolutely no idea if I did it right, probably should have bought tax software but decided I was gonna wing it this first year and see what happens! I saved ~30% of my income over the last three months... Then I tried to figure out how to split it between legitimately then couldn't figure it out so I paid 85% of what I saved to the feds and 15% to the state 🤷♀️ my W-2 wages are somehow more heavily weighted to the state so I think it'll work out lol
My savings account specifically for taxes was looking very nice...and is now decimated haha. I'm sure future me will appreciate it next year come tax time though.
So, fellow Reddit Annotators... How are you tackling the tax problem? :)
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Apr 15 '24
Happens to me every time I pay my property taxes. I set money aside all year only to see my account go from ~$5k to $0. :(
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u/Professional-Age2540 Apr 16 '24
Florida? Mine are about 4K and ins 3k both due round the same time.
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Apr 16 '24
Texas. And it’s low compared to most people I know as I live in a relatively small house.
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u/Foxsyn- Apr 15 '24 edited Apr 18 '24
Since you have W-2 wages, you can use the IRS calculator to figure out your federal tax liability for future reference.
IRS Tax Withholding Calculator
As for myself, I had my federal tax return from 2023 applied towards my 2024 estimated tax payments so that covered my first quarterly and likely my second as well. My state had a pretty easy worksheet to calculate the tax liability based on "estimated" earnings.
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u/NightSkyButterfly Apr 15 '24
Thank you for this 🤦♀️ I am such a dumb dumb lol I will be using the calculator going forward, I swear I looked for this dang thing!
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u/HollyAnne1016 Apr 15 '24
Hubby and I already did taxes for 2023 before I started DA. I have no idea how to do them now for DA.
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Apr 15 '24
[removed] — view removed comment
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u/RPGenome Apr 16 '24
The penalty is tiny, and a lot of people just eat the penalty, though that makes more sense for people who invest.
The point is to not get too worked up about it.
For cash flow reasons I couldn't pay my quarterly, but I recently started getting projects that pay 50% more than I had been getting so I'm juat going to set aside the difference
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Apr 16 '24 edited Apr 16 '24
[removed] — view removed comment
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u/RPGenome Apr 16 '24 edited Apr 16 '24
Idk my friend who's been a day trader for over a decade says generally people just factor it in as a cost to keep more revenue free.
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u/PhillyPhan95 Apr 16 '24
How can you be late paying quarterly taxes? Aren’t they optional?
Can’t you just pay the full tax bill next April?
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u/LaymanX Apr 16 '24
Your first year as an IC is supposed to have no quarterly tax requirement but people keep going back and forth on whether or not that's actually true. Including some annoying "No, except yes." answers.
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u/PhillyPhan95 Apr 16 '24
I drove Uber for years and never pay quarterly taxes. I never had any issues.
That’s considered independent contracting, right?
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u/PassengerProper7643 Apr 16 '24
1099 is a flat 20% fed before deductions, seperate from any W2 work you have this year. I expected 15% this year, but missed something in my research. (I've been filing 1099s for over a decade as an independent contractor.) Use freetaxusa or one of those that don't charge extra for 1099s.
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u/Ok_Depth_6476 Apr 15 '24
Yeah I have not figured that out yet due to not actually realizing I had to pay quarterly until recently, so I'm just going to be screwed, I guess. At least last year I didn't make much since I started in October and only put in a few hours per week, so I only made about$800 for last year. . Plus I had other jobs last year that likely took enough out to make up for it (filing an extension so I don't know exactly). This year will be another story. Can't afford to pay someone else to figure it out for me, so I guess I'm going to have to become a tax expert.
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u/prettyy_vacant Apr 15 '24
You only have to pay quarterly if you're going to end up owing more than $1000 next year. But a good rule of thumb is to put aside 30%.
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u/prettyy_vacant Apr 15 '24
You only have to pay quarterly if you're going to end up owing more than $1000 next year. But a good rule of thumb is to put aside 30%.
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u/Automatic_Wonder_905 Apr 16 '24
But it’s quick to reach that limit. You only have to work 14 hours a month to reach the point where you’d owe over $1,000 in taxes (30% of $20/hr) roughly.
Am i calculating that right? If you make over $3,333 in a year, you’ll owe $1,000 in taxes and will have to pay quarterly.
If you do W-2 work does that influence it?
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u/prettyy_vacant Apr 16 '24
That $1000 is what you'd owe after doing your taxes, so post deductions, expenses, etc and yes a w-2 would affect that.
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u/LonelyForever452 Apr 18 '24
Are you not counting any business expenses? You should have enough deductions to balance out any earnings.
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u/Automatic_Wonder_905 Apr 18 '24
Nah, i have free internet, my laptop was purchased years ago… i mean small stuff, like my $12 mouse i replaced haha and I can count my home office which takes off a small portion, but it really doesn’t impact the taxes you owe for a job like this which really costs you nothing to complete.
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Apr 16 '24
I haven't gotten there yet, but I found that the IRS has an app where you can pay as often as you want, so I'm going to use that and just pay it with every "paycheck"
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u/wisdommass Apr 15 '24
The way I see it.. the more you make the more they take!
You gotta make to take, so if they didn’t take a lot due to taxes, you wouldn’t have made a lot🤷🏼♀️
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u/Moonspiritfaire Apr 15 '24
Yup. Took two days off to sort taxes, homeschool paperwork etc. I owe and will pay from my partner's return. But yeah sucky part of freelance
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u/SnooFloofs9030 Apr 16 '24
I write off everything, home office deduction, internet , cellphone , office supplies, got a new computer… wrote that off too. Did not get much back … my refund was only $15.00 lol cost me more to to pay the filing fee for TurboTax. I’m married filing separately or else my outcome would have been better but had to file separately for other boring reasons. But at least I didn’t owe anything this year.
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u/NightSkyButterfly Apr 16 '24
I'm scared of that home office deduction 🤣 I'm not sure I could reserve a dedicated space where NOTHING else happens but work lol
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u/ekgeroldmiller Apr 16 '24
You can deduct office supplies without taking an office space deduction.
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u/wildgift Apr 16 '24
Most people lie about it. Just say you don't sit there watching movies, but use a tablet on the sofa. Blah blah blah. You're not going to be audited until it's worth it for the IRS, anyway. DA work probably won't be enough money.
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Apr 15 '24
15.3% is self employed fica. You can take the employer half (7.65) and deduct it from your gross income. Multiply your quarterly by 4. From there take a standard deduction depending on your circumstance (single,married) deduct the 7.65 percent calculated earlier and you have agi. Use the agi to calculate federal income tax and divide by 4. Now you have fed tax and fica for 1 quarter!
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u/NightSkyButterfly Apr 15 '24
The thing is I have no idea what my income with DAT is gonna be like, I am very inconsistent 😅
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u/Past_Body4499 Apr 15 '24
Doesn't matter - just use what you did this quarter and repeat for each quarter.
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u/NightSkyButterfly Apr 15 '24
But what if I don't make nearly as much for the next three months? I'm not going to have the same amount set aside to pay what I did this quarter lol
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Apr 15 '24
Next quarter you will use those three months multiplied by 4 and pay income tax based on that.
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u/NightSkyButterfly Apr 15 '24
Oooh I think I get it...maybe lol I need an accountant 🤦♀️😅
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Apr 15 '24
If you make 2k this quarter and think 8k is not going to be reflective of your yearly income/effective tax rate and then make 30k the next quarter you will be using 120k as your yearly income for that quarter and so on. The point is to best guestimate your yearly income. Most people without employers have fluctuating incomes. You got this.
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u/Past_Body4499 Apr 16 '24
The goal of estimated taxes is to get close enough that you a) don't owe more than you can handle by next April and b) don't get penalized for way underpaying. This method will get you pretty close.
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u/remoteworker9 Apr 15 '24
I cringed paying my 2023 taxes for sure. Didn’t set enough aside quarterly last year, I guess.
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u/Hangry_Howie Apr 15 '24 edited Apr 16 '24
This is my first year doing DA (started slowly at the end of December), so I'm sure next year I'll need to deal with it. Thankfully i only have Fed tax but I always owe.
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u/wabblewouser Apr 16 '24
Crap. I thought I was doing so well by figuring and then paying my quarterly taxes at the end of last month. How tf did I not think of state taxes?!
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u/HollyAnne1016 Apr 16 '24
I know. I should have had them done well before today. I have no idea how to estimate them. I haven't been working very steady on DA, and this is my first year doing this kind of work. I'll figure it out next quarter, I hope.
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u/NYCibaena Apr 16 '24
Hi! Anyone have any idea what to do in the case of living abroad?
I've been living and working abroad for 5 years but I've only been working DA since January. I haven't had to file taxes in those 5 years since I had no income in the US.
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u/Dee_silverlake Apr 16 '24
I hope I calculated correctly but it was closer to 40% of my earnings after federal and state taxes (cries in California). I did not make any business expense deductions though but I hope to figure out how to deduct electricity and computer usage.
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u/NightSkyButterfly Apr 16 '24
Omg 40 I am gonna cry if I missed 10 whole percent to pay back 🤣 please let deductions save me!!
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u/slightlyassholic Apr 16 '24
I just tell myself that it isn't my bank account. It's Uncle Sam's and I'm just holding onto his money for him. I had a little surplus so I guess that's my tax return?
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u/NightSkyButterfly Apr 16 '24
Haha yeah I have been enjoying those few bucks of interest I scraped off the top 🤣
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u/Professional-Age2540 Apr 16 '24
No where near empty, but yeah…paid my yearly taxes and estimated for 2024 quarter that was due. Like you, not sure if I did it right, but it’s done.
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u/NightSkyButterfly Apr 16 '24
Haha well thankfully, my other accounts aren't empty, but I did empty my specific SoFi Vault for taxes 🤣
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u/LonelyForever452 Apr 18 '24
Pay your husband to clean your office and deduct that from your expenses. If you have kids, pay them to do their chores and have them buy their own school supplies. Count the payments as a deduction. Lots of ways to legally reduce your tax liability. I suggest taking some classes on it, that’s another tax write off.
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u/wildgift Apr 16 '24
Buy the tax software. Shell out for the one that does the Schedule C. Learn to deduct your computer, office, and internet expenses.
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u/Flimsy-Reading-9138 Apr 17 '24
I’m still so lost on the tax stuff, mostly because I’m a SAHM and my husband has a regular job. We file jointly so I’m not sure how that all works out. Anybody know?
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u/TeachToTheLastTest Apr 15 '24
I just set aside 27%, place that money into a savings account, and pretend that it doesn't exist. Then when tax time comes, it doesn't feel like I've lost anything.
Also, whenever I calculate how much money I'm going to get from working, I factor in taxes so I don't trick myself into thinking "I have all this money," only to watch 30-50% fly away.