Quote:
Originally Posted by zagi
In my opinion its really simple.
Figure at 16,000 you'll end up paying 30% -- in federal, city and state taxes.
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What fucking city has income taxes? Some states like mine have ZERO income taxes. Most states with one the tax isn't anywhere near as much as the federal income tax.
Quote:
For 2007 Federal Income tax brackets you have:
http://www.irs.gov/formspubs/article...164272,00.html
$7,825 $31,850 $782.50 plus 15% of the amount over 7,825
So it looks like my initial 30% was too high.
You should be paying roughly 16,000 - 8000 = 8000 * 15% = 1200 + 782.50 = 2000$ in taxes!!! very nice! 
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Where do you guys get this shit? You'll are retarded. You don't even bring up self employment taxes and you completeley forget to take into account personal exemption and dependant deduction.
Let assume the $16k was his only sources of income. Let's also assume he will be filing single and no dependants other than himself. About $2261 would be owed in Self Emploment taxes. Half of that amount can be used to reduce his taxable income. That's $1130. Standard deduction is $5350 and dependant deduction is $3400. That's $9880. That gets subtracted off the 16,000 so that leaves $6120 in taxabe income. That puts him in the 10% tax bracket. So that's $613 owed in income taxes. Add in the $2261 in SE taxes you get at total of $2874 owed to the IRS.
Of course I didn't take into accont any deductions since I didn't know which ones he could LEGITIMATELY take. Also if he's married or has kids or has additional income from a job that changes a lot of things too. I was merely pointing out that at $16,000 you're taxes aren't going to be 30%.
By the way if he deducts all that crap he when wants and it's not all for business he's breaking the tax laws. You can only deduct internet, computer etc if it is 100% for your business. I doubt it is. Sure he could say 50% for business and 50% not and take 50% deduction. Let's just give the IRS a reason to audit him. I take what dedcutions I can that's not going to send off any red flags. Last thing I want or need is the government nosing in my business. But that's just me.