How much do you save for Uncle Sam?
Just closed my first deal, this is my first rodeo. As a 1099 employee and cre broker specifically how much do you save percentage wise from every paycheck to account for taxes at the end of the fiscal year?
[{"id": "evus1j6", "text": "I calculate my tax rate individually for each deal. \n\n\nThe important thing to remember is self-employment tax, not just income tax. It's exceedingly hard to get a break on the social security/Medicare taxes.", "replies": [{"id": "evvw0vu", "text": "How do you go about calculating your tax rate?", "replies": [{"id": "ew44g17", "text": "I know my income for the year and multiply it by the appropriate tax rate. When you move from one bracket to the other, you pay the higher tax rate only on the money over the threshold.\n\nI don't have state income tax, so I guess that makes it easier.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "evvp5vm", "text": "I just generally save 25-30% in a tax account. I\u2019m new in the business my first year I only made 37k so it broke out to me owing about 25%.", "replies": [], "depth": 1}, {"id": "evw4b12", "text": "40% and go ahead and pay your estimated taxes. Fines are steep. At some point, and based on your income, create an LLC and start filing as an s-corp. \n\nI screwed up one year and didn\u2019t put enough aside. Ended up owing and had to get on a payment plan with IRS. Don\u2019t do that.", "replies": [{"id": "ewdfcb0", "text": "\"40% and go ahead and pay your estimated taxes.\"\n\nWhat do you mean by this ?", "replies": [{"id": "ewdm8k6", "text": "Every time you get a paycheck, put 40% aside in an account. You have to pay estimated state and federal quarterly taxes or else you get penalized when you file. Next payment is due September 15. My accountant helps me figure out what my quarterly payments should be but you can always just send in 30-40% of whatever you made that quarter. If you underpay, they may fine you as well. If you overpay, you\u2019ll just get a refund at tax time.", "replies": [{"id": "ewdp3nj", "text": "Nevermind, I thought we were talking about investing and not paychecks.  My bad.   Still though, paying extra and letting the IRS pay you back is ludicrous.", "replies": [{"id": "ewe9ic6", "text": "You don\u2019t overpay on purpose. Sometimes it\u2019s just hard to predict what you will owe and you try to pay the absolute minimum without triggering an underpayment penalty.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "evz7ppt", "text": "I don't....I pretty much wing it.  It's worked for 12+ years, horrible advice, I know, but I make it work.  I brought in roughly $750,000 last year and was shaking when I went to pick up my papers from the accountant to see how much I was going to owe.  Made it work though!!", "replies": [{"id": "ewd4hhj", "text": "Are you in CRE?", "replies": [{"id": "ewfcur9", "text": "Yes", "replies": [{"id": "ewfd2hq", "text": "How long to get up to 750K a year?", "replies": [{"id": "ewff5bk", "text": "It's not always 750k, sometimes more/sometimes less.  I've been in CRE (not as an owner, just a broker) for 12 years and I remember the first year I made above 500K was either year 6 or 7, or within those 12 months (a lot of times I make a majority of my commissions between October through March, have no idea how it works like that).  I almost left the career at year 2, I thank GOD everyday that I did not make that decision and stuck through it - just for reference, I made 20k my first year and 20k my second year, I was basically making less than a walmart cashier with a Finance degree and an Masters in Business.", "replies": [{"id": "ewffkbo", "text": "Awesome info, will message you. I am in residential now and thinking of making the transition. Thanks again!", "replies": [{"id": "ewffswu", "text": "Feel free to anytime, good luck!", "replies": [{"id": "ewnkchh", "text": "What do you specialize in?", "replies": [{"id": "ewog7cc", "text": "Office and Industrial and a little land.  If I had to lay it out - 70% office, 25% industrial, 5% land.", "replies": [{"id": "ewqq6hj", "text": "Excuse me for butting in here but what are typical commission splits for you for all 3 respective? Office, Industrial, and Land? Are you at a big-name brokerage?", "replies": [], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]