Yes
No
For $100,000 Annual income
Monthly
Annual
Income
$100,000
Deductions
$12,950
Federal income tax
$14,913
Newyork state income tax
$3,658
FICA tax
$3,825
Self Employment tax
$11,911
Total tax
$34,307
Net pay
$65,692
Average tax rate is the effective tax rate that you incur on your income. If your income is $100 with 20% average tax rate and 30% marginal tax rate, you pay $20 in taxes.
Average tax rate is the effective tax rate that you incur on your income. If your income Marginal tax rate is the tax rate on the last dollar that you earned.If your income is $100 with 20% average tax rate and 30 % marginal tax rate and if you get 1 dollar bonus, you pay 30 tax on that bonus.
Average tax rates measure tax burden, while marginal tax rates measure the impact of taxes on incentives to earn, save, invest, or spend.
W2 employees
Freelancers
Increment percetage
Increased income
Increased net pay
10%
$110,000
$75,692
25%
$125,000
$90,692
50%
$150,000
$115,692
2X
$300,000
$265,692
3X
$400,000
$365,692
4X
$500,000
$465,692
The tax system in the US works on a pay-as-you-go basis, so the IRS collects income taxes throughout the year via payroll. Ideally, if you are a W-2 employee, you automatically get your taxes withheld by your employer. However, as a freelancer, taxes aren’t a cakewalk. They have to pay a bit extra in “self-employment tax” to contribute to Social Security and Medicare.
If you’re a W-2 employee then most likely, your taxes are already being withheld for you by your employer and you typically get a tax refund. Freelancers, self-employed individuals, and business owners have to handle their own taxes including the quarterly estimated tax payments.
Sounds complicated?
Fret not! Apps like FlyFin can help ease your burden.
With FlyFin you can stay on top of your taxes by paying your quarterly estimated obligations and tracking your business expenses. The A.I. calculates your taxes based on several inputs (your profession & income) and detects all possible deductions which ensures an accurate tax amount.
W2 employees
Freelancers
Freelancers using Flyin
FlyFin is an A.I.-powered tax service designed for freelancers to make taxes effortless. Right from finding tax write-offs to filing your taxes in just 5 mins, FlyFin is the only app you need. The A.I. scans all your expenses and finds all tax deductions that apply to you. If you’re unsure about an expense, you can seek unlimited help from the CPAs.
Download the app and fly through your taxes