Painless1099 takes care of your taxes by automatically saving the right amount for taxes as you earn your income. To do this, you’ll have to set you withholding type. Your withholding rate is how we’ll know how much to save and how much to send to you from each of your paychecks.
In this article, you’ll learn about the different withholding rate types, which is ideal for you, and how to get them set up.
There are two different withholding rate types to choose from:
- Projected Withholding uses the most current U.S. federal and state tax law along with your projected income and personal tax filing status to calculate how much should be withheld from every payment that comes into your Painless1099 account.
- Fixed Withholding allows you to tell us how much you’d like set aside every time you get paid and we’ll make sure that’s what’s withheld from each payment that comes into your Painless1099 account.
If you aren’t sure how much you should be saving for taxes, projected withholding is ideal for you. This option creates a personalized withholding rate based off of your personal tax information.
Your projected withholding rate will calculate what percentage of your income should go to cover your federal, state, medicare, and social security tax obligations.
To set your projected withholding, you’ll have to provide the following information:
- Projected income for 2017
- Tax filing status
- Number of dependents you claim
- State you file taxes in
- Number of states that you work in
Once you’ve provided this information, you’ll be given a detailed breakdown of your withholding rate. To continue on, click Select Projected Withholding.
Note: Projected income should include all income that you earn, this includes any income you earn from self-employment and your W2 job, if applicable.
Note: We regularly work with external tax professionals to audit our algorithms to ensure their accuracy.
If you work with a tax accountant who has previously advised a withholding rate or if you know what your contribution should be, then fixed rate is ideal for you.
To set a fixed withholding rate, just simply input the percentage that you’d like your income withheld at and click Select Fixed Rate.
Once, your withholding is set, the next step is Making A Deposit.