Someone explain to me what I should do with my 1099

[multiband8303]

Enlisted into a contract with Medtronic for 12 months now, they will pay me 1099, to my understanding that means they do not take taxes out of my check, and that it is my obligation to find shelter for this money come next year. Am I correct?

Also how much should I set aside?

 

[Mermaidman]

You have to make quarterly Federal and state income tax payments to avoid penalties. If your income for 2007 will be similar to 2006, then just base your estimate on it.

http://taxes.about.com/od/taxp...ht/estimated_taxes.htm

 

[SearchMaster]

Correct, you have to file it yourself. Also, you'll likely need to file quarterly returns to pay taxes on that quarter's earnings.

The amount of tax will basically be the same as it would be if you were salaried, except you'll have to pay the employer's match on FICA and Medicare (an extra 7.65%, or at least that's what it used to be).

In general when I was self-employed, I kept 33% of my pay around to pay the taxes each quarter.

 

[Blieb]

25-30% minimum ...

Also, make sure you have some type of health coverage!!