How much total tax will i be paying as a self employed person living in california with gross income of $64000?

Asked over 1 year ago - Venice, CA

i heard that i would be paying close to 40% of my total income in taxes, which would be close to $27000!

is this true?!!!

Additional information

i heard that federal income bracket for me would be 20%, california state tax is 8%, and self employed tax is 15.3%. is this correct??

Attorney answers (3)

  1. Andrew B Gordon

    Pro

    Contributor Level 11

    4

    Lawyers agree

    Answered . While those may be the statutory tax rate, your effective tax rate is the percentage you actually pay. A good CPA or tax attorney can help reduce your effective tax rate with tax savings strategies. You should hire an attorney, CPA, or both (like me) to prepare your taxes to ensure you are taking all the deductions you are entitled to.

    Best of luck,
    Andrew

    Andrew B Gordon is a CPA and attorney licensed to practice law in Illinois. The information provided here is for... more
  2. Eric Jerome Gold

    Pro

    Contributor Level 19

    2

    Lawyers agree

    Answered . My colleagues are spot on with their responses. Your effective tax rate and the statutory rates are different animals. You should consult with a local tax attorney or CPA for guidance and assistance to be sure you maximize your returns.

    ** LEGAL DISCLAIMER ** My response above is not legal advice and it does not establish an attoreny-client... more
  3. Todd Matthew Heine

    Contributor Level 13

    3

    Lawyers agree

    Answered . Andrew is on target with his answer below: while the 40% estimate represents your statutory tax rate, your effective tax rate may be much lower because of deductions. If you think of the $64k as revenue, your business costs will reduce your taxable income significantly.

    Here is a little action plan:

    1. Learn more about deductible expenses.
    2. Keep decent records of your deductible expenses.
    3. Set aside your estimate tax liability each month.
    4. FIle an accurate and timely tax return.

    Now, you may be able to do all of this on your own with some careful research and something like TurboTax. You other option is to pay for a consultation with a CPA, who will help teach you what you need to know and do in detail. Your other (other) option is to pay a CPA to do it all for you.

    I hope this helps. Feel free to get in touch with me (or any other advisor!) for a complimentary consultation to discuss further.

    Total Mobility Law is an international law firm that lets companies do global business with the knowledge and... more

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