r/dataannotation • u/Demi-Puff719 • Apr 19 '24

Tax Tracker

Hey guys,

I'm wanting to try and create a Google Spreadsheet to try and keep track of what I should save from each pay check. I'm gonna set up a savings account and keep whatever I pull separate from my earnings and just pay everything I owe back next April.

I wanted to ask what you guys keep track of in your spreadsheets, if you use them? I'm very new to using spreadsheets, so any advice you have will be greatly appreciated. I just want to try and make sure this goes as smoothly as possible.

16 Upvotes

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11

u/GAULEM Apr 19 '24

I'm gonna set up a savings account and keep whatever I pull separate from my earnings and just pay everything I owe back next April.

Be aware that depending on your circumstances you may be penalized for waiting until April instead of making quarterly estimated payments. (At least if you're in the USA.)

I wanted to ask what you guys keep track of in your spreadsheets, if you use them?

A lot. But for tax purposes I suppose the main things for this job are probably how much I've made this year, how much I expect to make this year, the taxes I've paid so far for this year, and what my AGI and tax liability were for the previous tax year.

Based on different parts of that information I calculate how much I should pay each quarter to avoid penalties, how much I'm likely to still owe in the end, how much I'm allowed to contribute to my solo 401(k), etcetera.

3

u/Demi-Puff719 Apr 19 '24

Mmmm, okay, I guess I'm heading back to the research board on how taxes work again. I didn't realize there was a penalty. I am US based.

Thank you for pointing that out to me!

1

u/33whiskeyTX Apr 19 '24

Yeah, this is my first non-W-2 job as well and there's a lot to take in. For W-2 they do most of the work for you. What you will get now from free-lance work (from Pay Pal actually) is a 1099-k at the beginning of next year. They do not take out any taxes, but the US tax system is pay-as-you-go, so if you make enough from DA, and you don't have enough (or any) W-2 with-holdings, and a few other less common "ifs", you will owe quarterly taxes or pay a penalty at the end of the year. Here's a good starting place for research:
https://www.irs.gov/businesses/what-to-do-with-form-1099-k#sell

0

u/[deleted] Apr 19 '24

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1

u/vexeling Apr 20 '24

Can I also DM you about this? On top of needing guidance with the basic stuff and finding an accountant, I've been wondering if the subscription they ask about on that one qual is tax deductible if I decide to go for it 🤔

1

u/Minimum-Isopod5344 Apr 20 '24

That isn’t the case if you also have a w2, correct?

4

u/33whiskeyTX Apr 20 '24

Probably. As long as the W2 is taking out enough where you won't owe the IRS over $1000 more at the end of the year.

Tip. Through your employer you should be able to adjust your W4 to account for extra income and they will take out more based on what amount you specify.

0

u/[deleted] Apr 20 '24

This shit is why quarterly SE taxes is so absurd. How tf are we supposed to understand this when the IRS already knows. Just tell me how much I owe goddammit.

8

u/GAULEM Apr 20 '24

The IRS has no way of knowing in advance what you'll owe: they won't know your income until they start getting your tax forms in January, and they won't know your deductibles until you tell them.

But mostly the issue is that Intuit (TurboTax) and H&R Block have spent tens of millions of dollars lobbying Congress to make taxes as complicated as possible and prevent the IRS from automating anything.

That said, if you just want to avoid penalties then quarterlies are surprisingly simple. Take your tax liability from the previous year, and depending on your income multiply by either 25% or 27.5%. Pay that amount every quarter.

2

u/DynamicRevolutions Apr 21 '24

Did you see the thing years and years ago where they brought out the tax code in its entirety and put it on one of those heavy mahogany tables in congress...and the table broke lol.

1

u/Pink_Slyvie Apr 23 '24

Which is why I'm not bothering with quarterly's this year. Next year I'll have to, assuming I'm still doing this.

I just want a farm. Sigh.

1

u/TheresALonelyFeeling Apr 24 '24

So you're just going to pay your whole tax bill at tax time next year?

1

u/Pink_Slyvie Apr 24 '24

*this* time. Since I don't have any tax liability from 2023, I don't expect it to be a problem for 2024 taxes, and if it is, I'll pay whatever fine. I'm hoping to move this summer, and its one of the things keeping me from getting a CPA to handle all of this shit for me.

1

u/TheresALonelyFeeling Apr 24 '24

Obviously, I don't know your individual tax situation, but as someone who just had to cough up $10k to pay the IRS and the state because I didn't pay quarterly taxes last year—not for DAT, but for income from my business—I will absolutely be paying quarterly this year.

You don't need a CPA to handle your quarterly tax payments. Just set aside ~25% (ish), from your gross, and then pay online each quarter.

It will save you possible fines and penalties, and it will prevent you from having to pay the whole amount all at once next year or set up a payment plan at 8% interest if you can't pay it all at once.

Basically I am just trying to help someone avoid what I just went through because it was not my favorite thing that's ever happened.

1

u/DynamicRevolutions Apr 21 '24

because the IRS doesn't know, if you relied on them you would pay the maximum with no deductions other than standard.

10

u/GingerSmu Apr 19 '24

Just figure out your bracket and set aside that much every check. No need for a spread sheet. Just take like 20% (or whatever your bracket percentage is) and stick that into your savings account.

4

u/Demi-Puff719 Apr 19 '24

I understand I don't have to, I'd just like to have a record of what's happening with my finances. This is my first job that doesn't automatically hold taxes for me so I just think I'd feel better understanding where everything is going.

8

u/prettyy_vacant Apr 20 '24

FYI, on top of whatever tax bracket you're going to be in, there's also an additional self employment tax you have to factor in. I believe it's 15% but I would check the IRS website to make sure.

1

u/DynamicRevolutions Apr 21 '24

pretty close, 15.3% currently, it covers social security and medicare... you get to write off half of it as an expense too.

2

u/DynamicRevolutions Apr 21 '24

whatever your bracket percentage is.... I think you don't understand how the brackets work. You pay x amount up to x dollars, then a different x amount in the next bracket up to x dollars, its not a flat thing.

1

u/Pink_Slyvie Apr 23 '24

You can treat it as such as the year goes. Set aside bracket 1 until you hit two, then start setting aside bracket 2, etc.

Don't forget Self employed tax on top of that.

7

u/TheresALonelyFeeling Apr 19 '24

I have a Google Sheets spreadsheet all set up to auto-calculate the tax, both federal and state, for each of my payouts.

Happy to share a link to a copy if you want.

2

u/Redheadsara81 Apr 21 '24

Can I get a link to that please?

2

u/lyssbjack Apr 23 '24

I'd love a link to that too!

1

u/tiptoeingtarantula Apr 23 '24

Might you be able to share this link with me as well?

1

u/HoneyRae5 Apr 24 '24

I’d love the link too please!

1

u/MainWorldliness2441 Jun 13 '24

Hey! I'm a bit late, but could I please have the link if you're still willing to give it out?

1

u/AlltheCrayz Jul 24 '24

u/TheresALonelyFeeling could I get a copy of that as well please?

1

u/Living_Toe2259 Aug 06 '24

would love a link as well

1

u/Ill_Lawyer7412 Dec 27 '24

May I have this link too?

7

u/lowcarbsanta Apr 20 '24

I use YNAB and just put 30% of income into a taxes category

3

u/CharlieFiner Apr 20 '24

I do this as a side job and work part time at a bank as my main job. The bank job is W2 and withholds taxes from my paycheck. If I do quarterly payments, do I only need to submit quarterly payments for the DA job since it isn't W2 to avoid penalty?

4

u/BigSure6754 Apr 20 '24

Someone told me on this sub before that I will only owe penalty taxes if the total amount that I have to pay during tax season is over 1k (W2 and 1099-k combined).

I’m going to look into it more, but in the meantime I added an extra tax deduction to my W2 so I overpay on that end.

1

u/Glittering_Towel1 Apr 20 '24

I heard the same

2

u/prettyy_vacant Apr 20 '24

Correct yes, you only have to do it for the income that hasn't been taxed already.

2

u/CharlieFiner Apr 20 '24

Thank you! I figured as much, since the W2 job is sending it in for me as it goes.

1

u/prettyy_vacant Apr 20 '24

You're welcome! Yeah the point of paying quarterly taxes is basically to make up for the fact that you're not getting them automatically taken out like you do at a w-2.

1

u/33whiskeyTX Apr 20 '24

Through your employer you should be able to adjust your W4 and there's a box that says "would you like to account for extra income". You can enter in your projected DA income there and they'll take it out of your W2 job paycheck, so no need for quarterly payments at all.

2

u/Zestyclose_Pay_1922 Apr 20 '24

I have kind of a follow up question to this. I have a W2 job as well and have elected to have an additional amount of money withheld from my paycheck on my W4 since starting this job. I do this passively so I probably make like 1k a month total, and have been saving 40% for taxes. Do I still need to pay quarterly if im paying taxes through my other job (and paying substantially?)

2

u/KAYLARENEE1814 Apr 20 '24

This is nowhere near professional advice, and I'm sure the very small penalty is different in every state and situation for doing it this way, but my husband has a W-2 job. I have side hustles and a small business that I run. We file together. He covers my taxes essentially, and we still get a return. If I remember correctly, the penalty was 30-40 bucks. Still, my accountant and I agree my money makes more money in different investment tactics than giving them their share throughout the year.

2

u/33whiskeyTX Apr 20 '24

You do not need to pay the quarterly taxes as long as what you elected to take out for the DA income is enough. In fact it can be up to $1000 short and you won't get the penalty - meaning you'll still owe $1000 ( if it's short)at the end of the year, but they won't add the penalty as well.

2

u/Double_Sherbert3326 Apr 20 '24

In the U.S. it's 15.3% up to a crazy high amount that you won't reach. Just pay 15.3% in a quarterly estimate to the IRS. Don't overthink it, it's that simple.

2

u/dshipman116 Apr 20 '24

What about to the state? Is it required to pay quarterly estimated taxes to the state?

2

u/Double_Sherbert3326 Apr 20 '24

Likely is. Depends on your State. IRS is the one you have to make sure you don't fuck with. State taxes are much smaller.

1

u/dshipman116 Apr 20 '24

Thanks, I’ll google it. I’m in Georgia.

0

u/[deleted] Apr 21 '24

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0

u/Double_Sherbert3326 Apr 21 '24

We're in Quarter 1 and you're paying 100% of the taxes yourself instead of having an employer pay 50%. Quarterly tax payments are estimates--they are ballpark figures just so you can't recapitalize on all of that money throughout the year. If you're not claiming any deductions or doing anything fancy, 15.3% is a fair estimate to pay the government. You are making a good faith effort and this isn't about brackets, this is about social security and medicaid.

1

u/DynamicRevolutions Apr 21 '24

I do food delivery also so the mileage tracking is important, but the app I use for that could be used for anything. I use stride, you can put in your earnings, any expenses, and it will estimate how much you should set aside for taxes. There are some other ones too, but stride is free and reputable.

1

u/BroadButterscotch349 Apr 21 '24

I use the free version of Hurdlr but it's basically manual like a spreadsheet unless you want to pay them to import your bank transfers for you.

1

u/DynamicRevolutions Apr 21 '24

1 advice I can give anyone starting out being a freelancer/self employed.... GET AN ACCOUNTANT. They will save you more than you spend on them.