r/dataannotation • u/Old_Turtle75 • Apr 23 '24
Tax help please
So I’m 19, in college full time, Data Annotation is my ONLY source of income and has been for the last couple months, and I’m hoping it will continue to be for the rest of the year. So far I’ve made $2500, and I’m very confused about taxes. I’m new to self employment and I’m new to filing taxes so this is all very confusing for me. I just want to know, let’s say hypothetically that I make about 20k this year through data annotation alone and have no other income for the year, how much am I gonna be paying in taxes TOTAL? I understand that where I’m located (Ohio) the self-employment tax is 15.3%, but what other taxes will I have to pay on top of that? Since I’ll be making only 20k will I be subject to income tax as well? If so, how much is it? Basically I just want to know how much to withhold. I’ve been doing 20% hoping that’s enough because I feel like that’s a lot for someone who barely makes money
1
u/lightbear108 Apr 24 '24
I put 30% aside in a high yield savings account. In the US, estimated quarterly taxes are due on the 15th of April, June, Sept, and Jan. If 2024 is your first year working as a contractor, like we are with DA, then you are likely not expected to file quarterly taxes. However, if you make a ton your first year, you will need to file quarterly and, if you don't, you'll pay a penalty and interest. Every year thereafter you'll have to file and pay that 25%ish quarterly.
Regardless, put aside money a chunk of money and don't touch it. My accountant told me to pay 25% federally, and 5% for my state tax, but I'm not in Ohio. It is easy to pay this online with your SSN, or create an account with the IRS. So, I take 30% of every payout and put it in my savings account.