12 Week Numbers on New Lease

You're saying that he pays 15% self employment tax on his $0.75 cpm net so ($0.75 cpm x 15% = $0.1125 cpm in self employment tax) right?? Wrong how can you forget about deductions. Your tax rate is applied to income after deductions......

 

@Prime-Mate,
Thanks for the numbers. I have not read any of yours other post and will go back an look at them, but first a few quick questions. I assume your with Prime Inc. Which division (reefer, flat, etc. ) ? You lease purchase , or straight lease ? Are you in a lightweight tractor ? Are you getting the miles and rates you thought you would get or better or worse ?
Thanks in advance for any info .

 

That .75cpm is his net after deductions but before taxes and pay. What other deductions do you think there are? The onlydeduction left is the standard deduction. That varie based on how he is filing and could result in my math being off by a few pennies.
His net to the bank is after Prime has deducted his expenses. There aren’t any business related deductions left.

 

I think he is talking about the social security deduction, not federal income tax. Roughly, a self-employed (1099) person pays 15% on the first $90k , while a regular employeed person pays half of the that and "their employer pays" the other half.

 

Sorry, I meant to write "social security tax" not "social security deduction". The .75cpm is his income after all business related "expenses" and before taxes (and therefore deductions).

 

If you are self employed you’re paying all of it and only a portion is deductible. In my post I recommended a way he could save a lot on the taxes.

 

No that is not income after deductions. Yes there are deductions and yes they are a big deal.

-Standard deduction for 2018 $12,000 for single $24,000 for married
-20% pass though cooperation deduction, allows 20% of net to be deducted

 

I’m assuming he is simply self employed. Self employed and a pass through entity are two different things. I recommended that he incorporate and elect to be taxed as a sole proprietor, a type of pass through entity, to save money, one of them you mentioned.

 

Op, if you were using an already prepared profit loss form you would have a better insight into what you are and are not making. All reality after the tax man cometh takes his share then social security wants theirs and don't forget the state, you have in all likelihood only possibly made 35 cpm.