I'm a new agent trying to calculate what I should be saving towards fed/nj tax. Searched web for % to figure, can't find. Help...

What you should be doing is paying quarterly estimates every 3 months; that's what the IRS requires.

You need to sit down with an accountant or CPA and get some help now, before next April 15th and you're wondering where the money went.

3rd quarter, 2007 estimates are due September 15th of this year.

As a rough rule of thumb 10 to 20% should be sufficient.

YMMV

I'm no expert or CPE but I've run other businesses before - so unles I'm mistaken - your first year in the biz you don't need to do quartly estimated tax - you can just save the money aside (to be smart that is, otherwise get slammed come tax time) and then the following year you will be required to pay it.

Personally I wouldn't volunteer because you have no idea how much you are going to be making your first year so why rock the boat til you know.

Personally I'll be saving 40% aside because self employment tax is approx 33% so I figure better to be safe then sorry.

Maybe a CPE/accountant will have different advice but that's what I'd do.

GL
Rae

Personally I'll be saving 40% aside because self employment tax is approx 33% so I figure better to be safe then sorry.


Self-employment tax is 15.3% Half of which you get to deduct from page 1 of the 1040. I'd go with 20 to 25% depending on what other taxable income you have.

This also depends on if you incorporate usually as an llc.You can do an s or c corp but for most agents the llc makes the most sense.You can allocate 50 percent dividends to the corporation and take write-offs so that you in effect cut your self employment tax in half.Each person is different on a case by case basis.