O/O tax question- how much to set aside for taxes?

Discussion in 'Trucker Taxes and Truck Financing' started by RoadToad69, Dec 16, 2008.

  1. Dec 16, 2008 #1
    RoadToad69

    RoadToad69 Mistress of Mayhem

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    I am contemplating buying a truck through my current company and have been hashing through figures to see if I will actually come out better as a O/O than a company driver.
    The uncertainty is how much I will need to set aside out of each paycheck for taxes. I have been using 25% of net pay for my calculations but I pretty much just pulled that out of the air.
    Do any o/o's or tax gurus out there have any idea of a more true percentage?

    RT69
     
    RoadToad69, Dec 16, 2008
    RoadToad69, Dec 16, 2008
    #1
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  3. Jan 12, 2009 #2
    jdrentzjr

    jdrentzjr Road Train Member

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    My experience says, 20% of net income should be sent to the IRS quarterly. This will come close, if not doing so, to covering all Self Employment Tax and your Social Security contributions, and keep the IRS happy. Good luck.
     
    jdrentzjr, Jan 12, 2009
    jdrentzjr, Jan 12, 2009
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    Beans Thanks this.
  4. Feb 7, 2009 #3
    SheepDog

    SheepDog Road Train Member

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    First, I want to make it clear, I am not buying my own truck anytime soon...LOL Just doing research.

    Is the 20% you mention out of the total, before expenses like fuel, maint etc..or the amount after the expenses? (fixed & variable).

    Thanks,,,
     
    SheepDog, Feb 7, 2009
    SheepDog, Feb 7, 2009
    #3
  5. Feb 7, 2009 #4
    PharmPhail

    PharmPhail Road Train Member

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    You can set it aside, but you probably won't owe anything with what your gonna make the first couple years, now anyway.
     
    PharmPhail, Feb 7, 2009
    PharmPhail, Feb 7, 2009
    #4
  7. Feb 8, 2009 #5
    jdrentzjr

    jdrentzjr Road Train Member

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    Good question. The 20% should be paid on the total after your fixed and variable expenses.
     
    jdrentzjr, Feb 8, 2009
    jdrentzjr, Feb 8, 2009
    #5
    SheepDog and Dr Demented Thank this.
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