The Paycheck Calculator Should Be Used To Estimate Your Final: Fill & Download for Free

This is the approach I would use, but keep in mind it is only a rough 'thumb up in the air' method. The quarterly estimated payments you are required to make, as an independent contractor, are just that -- estimates. When you complete your final tax return for the year, that is when your final tax liabilities are 'trued up' and you wind up with paying or receiving a refund for the differential (i.e. actual versus estimates).The main thing is that you pay the bulk of your tax liability before the tax return is filed, in order to avoid unwanted penalties.I would use last year's tax return as a rough guide. Open up Excel (or other spreadsheet program) and create the following format.This 'simple' example paints very broad strokes, but the idea is to set last year's actual return right alongside this year's tax projections. For the purpose of simplicity, I have made both of your gross incomes (from employment activities) identical for both years ($100K each).The second thing is to quantify what your taxable income will be. This is the amount you pay tax on, which will undoubtedly differ from your gross earnings. I haven't outlined the reasons why they differ because it is impossible for me to know what components will affect you. The most common ones are:itemized deductionsexemptionscapital gains/(losses)dividendsAdditionally, as a contractor, you may have legitimate business expenses, which can also be used to reduce your taxable income. This will apply only to the year when you were an independent contractor.Again, using last year as a guideline, try to estimate what these items will be for the current year. If your lifestyle has remained constant between the two years, very likely these reconciling items will be pretty close between the two years. If something has changed dramatically, such as you no longer having a mortgage or owning property in one of the years, you should account for the differences in your itemized deductions (i.e. mortgage interest, property taxes).As you examine last year's tax return, you will see that there exists a percentage relationship between the taxes you paid and the taxable earnings. In this example, you paid 25% in federal taxes and 10% in state taxes. These rates can be applied to the current year's taxable earnings calculation, which will be derived from your estimated gross earnings plus or minus the aforementioned reconciling items.Now that you have your total tax liability estimate for the current year, you can subtract your husband's portion (what you estimate he will pay in federal and state income taxes, via his payroll deductions). If he is on a salary, you can examine one of his paychecks (with respect to the taxes that were withheld) and multiply that by the number of paychecks he'll receive this year (probably 24 or 26) (Section B).Section A minus Section B should be your share of the total tax liability. The table presented below is on an annual basis. Therefore, each quarterly payment should be one fourth of the amount you anticipate paying.Please note, I am making a number of grand assumptions here (the reason both Wray and I are hesitant to provide a definitive answer), and your situation may differ materially. It may be that your income is extremely uneven, that you could make twice or three times the amount from one quarter to the next. About the best you can do is to estimate the seasonality of your consulting and to continually fine-tune your estimates by updating your spreadsheet (in order to arrive at a reasonable annual estimate).I hope this advice proves helpful to you. Good luck.

I’ll bite.This answer is hypothetical, generic, and definitely is not tax advice, ok?Take-Home-Paycheck Calculator has handy tools to estimate this stuff. Disregarding any state tax, using two allowances, the picture looks like this:2017 Bi-weekly Pay of Annual Income of $65,000.00AmountGross Pay $2,500.00Federal Income Tax $335.41Social Security Tax $155.00Medicare Tax $36.25State Income Tax $0.00Final Pay Check $1,973.34Which is $51,307 per year, again, not including state taxes or anything you take out for medical insurance, retirement accounts, or whatever else.You should run your own numbers—at least go plug in your state taxes—or talk with a tax planner who can. If this is your real job, not just for “what-if?” you can also look at your last tax return or at your latest paycheck, although your paycheck won’t tell you whether you owe or get a refund.

YNAB - You Need A Budget. I’ve been using this for two years, and I just made my girlfriend to use it too. Website link here. . .I did budgeting, but turns out I am just recording my expenses. Compared to people who doesn’t take control of their cash inflow and outflow at all, recording my expenses is good enough to know my spending habits. The problem is, I never get to control my spending, with my own EXCEL “budgeting” sheet.YNAB is a budgeting tool, stand for You Need A Budget, and so far the best for me. What made them the best is not just their user-friendly interface, and auto-generated report, it’s their philosophy, or they call them the 4 rules of budgeting.RULE 1: Assign Every Dollar A JobSimple common sense budgeting rules but we usually don’t do it. First, I didn’t do it before because I am only recording my expenses, I never plan in advance how much I should or I can spend for each category.The second reason why most of us failed to do this is because we don’t assign a specific amount of our savings, or emergency fund, or anything we don’t spend it away. Which usually lead us to spend it on something else end of the month.Therefore starting today, check on how much cash on hand you have, and then assign every single dollar with a job. Regardless monthly bills or investment savings, they are going to work hard for you starting now, not you are working hard to them.RULE 2: Embrace Your True ExpensesThis second rule alone benefits me the most. We always have something big that we are not paying monthly or less frequently, such as birthday gifts, vacation expenses, and emergency funds.The idea here is to set an amount aside monthly for these categories, which made up big enough amounts when these spendings come. With this rule, you won’t feel the burden pay a big amount in a certain month, which you had got them ready.RULE 3: Roll with The PunchesMost people thought about budgeting, but they have a hard time when come to assign every dollar a job. You might think that you can’t control or you don’t know how much you are going to spend on your foods, and that’s alone stopping you from starting this life-changing habit.Everyone knows about this simple idea, but YNAB emphasizes it a lot to get their users started. We don’t need to know how much exactly we will spend, simple estimate an amount and write them down.What about when you spend more? Just change it then. You might spend more on dining out this month but less on grocery, therefore on your budgeting sheet, you will need just to increase the dining budget and reduce the grocery budget.After all, budgeting supposes to be fun, just like we suppose to enjoy life.RULE 4: Age Your MoneyThis is totally a new idea that most of us think we can’t achieve it. What is this rule is about? YNAB basically set a simple goal for their users (or anyone who like to take the challenge) to live a financially stress-free life.After months of budgeting with rules above, you will basically understand your spending habits and start to control your expenses. Now, here is one goal for you to achieve.Slowly save up an amount and start spending your last month salary for this month expenses. Which mean all your expenses for March will come not from the paycheck you received early March, but early February.When you achieve this, you eventually set yourself stress-free from the paycheck-to-paycheck lifestyle. You will have a peace of mind for monthly rental and bills because you know you have already the cash ready.YNAB Helped Me to Save More and Earn MoreSo, what your budgeting tool is doing for you? Telling you that you have no money to spend and ask you to eat less in order to survive? You might have the wrong mindset in budgeting.Since I started to use YNAB, I understand how much I actually have and how much I am making every month. Besides, I have never been so clear on how much I need, not to survive, but to live a balance and my desired lifestyle, and let money working harder for me.With every expense lay out in front of me, I started to change my spending habits. I put a higher priority to:Savings – I started to set up strict emergency funds and future investment savingsClearing Debts – Little by little, clearing out my school debts and personal debtsGiving – To do charity, and giving more to my family consistentlyWhat about my monthly bills and daily expenses? Yes, with the above as my higher priority, I don’t have to spend less, but carefully. You see, we always have enough money to spend, but we tend to spend on things that we don’t need without control.Finally, the best part is here, when you start following these 4 rules, you will attract more income into your life. How? There is a million way to make more money, the right question is why. Because first, you understand how much you actually need monthly; and then, you have peace of mind to pursuit your desired venture (with rules #4).Understand Your DefinitionBy and large, budgeting is important in taking us to the next level financially and mentally. It’s a good habit to practice in our life. If your excuse is budgeting took too much afford and time with the calculation that are turning you off, this is exact where YNAB comes into play.With YNAB, I literally spend less than an hour to budget every month, which is less than 2 minutes a day, do you willing to spend 2 minutes a day to transform your life?Here is something I read in The 4-Hour Workweek by Tim Ferriss: “Understand what you want in life and define your desired lifestyle clearly”. Most of us don’t need millions sitting in the bank; I rather have $10,000 of consistent monthly income. And YNAB is helping me to achieve this step by step.. . .PS: I am not endorsed by YNAB to write this. I was sharing this to my friends who are interested in how I do budgeting this morning, and I think it might benefits you too.PSS: If you are from YNAB, I like to say thanks to you and your great team!