# How much do you withhold and where do you put it?



## jgraham11 (Nov 2, 2019)

Hi Everyone, 

I was curious on average what people withhold per check when it comes to taxes? I've been withholding around 20% to 23% per check as I'd assume my tax rate won't be that much higher. I pay student loans which helps a lot when it comes to either getting money back or not having to give any money to the government at least. So just curious what the consensus is here on how much to withhold?

Also, what do you do with it? I actually invest quite a bit of money and I know of a great ETN that pays an annual dividend of 18%. Fairly safe, obviously not as safe as bonds or a money market fund, but you really don't get anything from them. I just don't like the money I'm withholding being complacent and not earning anything.


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## Older Chauffeur (Oct 16, 2014)

Just FYI, in case you’re not already paying in quarterly estimated taxes, there are rules that require those payments if you expect to owe more than $1000 at filing time. You won’t be penalized if you have paid in at least 90% of current taxes due, or an amount equal to 100% of the prior years taxes.
If you have paid through regular employment withholding, that will help, but bear in mind you will have self employment contributions of 15.3% (SECA) in addition to any income taxes due. Good on you for making the effort to save for taxes and investing. :thumbup:


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## kingcorey321 (May 20, 2018)

with holding zero. I claim all my miles driving on uber and times it by 2 and all my other deductions there are zero taxes owned at the end of the year.


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## jgraham11 (Nov 2, 2019)

Older Chauffeur said:


> Just FYI, in case you're not already paying in quarterly estimated taxes, there are rules that require those payments if you expect to owe more than $1000 at filing time. You won't be penalized if you have paid in at least 90% of current taxes due, or an amount equal to 100% of the prior years taxes.
> If you have paid through regular employment withholding, that will help, but bear in mind you will have self employment contributions of 15.3% (SECA) in addition to any income taxes due. Good on you for making the effort to save for taxes and investing. :thumbup:


How do you apply quarterly? Is that like something you can do on TurboTax? What service do you use?


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## Stevie The magic Unicorn (Apr 3, 2018)

jgraham11 said:


> How do you apply quarterly? Is that like something you can do on TurboTax? What service do you use?


You PAY quarterly, you FILE anually.

Direct pay (with a bank account)


https://directpay.irs.gov/directpay/payment?execution=e1s1



Credit card
https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card
On a side note, i'd be shocked if most drivers in most markets owed anything.


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## jgraham11 (Nov 2, 2019)

Stevie The magic Unicorn said:


> You PAY quarterly, you FILE anually.
> 
> Direct pay (with a bank account)
> 
> ...


Ahh, thank you


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## Dekero (Sep 24, 2019)

Umm not a dime, and in my pocket?

Thx to my wife working and all the milage I've ended up on the positive every year so far...


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## Stevie The magic Unicorn (Apr 3, 2018)

Specically you owe a % on anything you make after any deductible expenses. In most markets it’s a great big pile of nothing...


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## FLKeys (Dec 27, 2018)

jgraham11 said:


> Hi Everyone,
> 
> I was curious on average what people withhold per check when it comes to taxes? I've been withholding around 20% to 23% per check as I'd assume my tax rate won't be that much higher. I pay student loans which helps a lot when it comes to either getting money back or not having to give any money to the government at least. So just curious what the consensus is here on how much to withhold?
> 
> Also, what do you do with it? I actually invest quite a bit of money and I know of a great ETN that pays an annual dividend of 18%. Fairly safe, obviously not as safe as bonds or a money market fund, but you really don't get anything from them. I just don't like the money I'm withholding being complacent and not earning anything.


I keep a record of all my rides along with mileage logs and track my misc deductible expenses. I can see a basic taxable profit at any given time. My spreadsheet then calculates a basic tax liability including Federal taxes and Self Employment Taxes. As a baseline I use 35% for my given situation.

I also have my spreadsheet calculate how much I need to put away for future car repairs I know my car cost me around 30¢ per mile including depreciation. So 30¢ per mile gets put into the car repair/replace/fuel fund. This way I always have money to do repairs and after 5 years I'll have enough put away to replace my car with a brand new car if I continue to drive at my current pace.

Taxable profits ultimately get placed into a sheltered retirement account to off set my tax liability until retirement. Non taxable profits, the difference between the IRS mileage allowance and my estimated cost per mile gets put into a Roth IRA until my annual contribution is maxed out. Anything left becomes fun money.


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## Bob Reynolds (Dec 20, 2014)

FLKeys said:


> I keep a record of all my rides along with mileage logs and track my misc deductible expenses. I can see a basic taxable profit at any given time. My spreadsheet then calculates a basic tax liability including Federal taxes and Self Employment Taxes. As a baseline I use 35% for my given situation.
> 
> I also have my spreadsheet calculate how much I need to put away for future car repairs I know my car cost me around 30¢ per mile including depreciation. So 30¢ per mile gets put into the car repair/replace/fuel fund. This way I always have money to do repairs and after 5 years I'll have enough put away to replace my car with a brand new car if I continue to drive at my current pace.
> 
> Taxable profits ultimately get placed into a sheltered retirement account to off set my tax liability until retirement. Non taxable profits, the difference between the IRS mileage allowance and my estimated cost per mile gets put into a Roth IRA until my annual contribution is maxed out. Anything left becomes fun money.


How much do you spend per mile just for fuel?


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## jgraham11 (Nov 2, 2019)

FLKeys said:


> I keep a record of all my rides along with mileage logs and track my misc deductible expenses. I can see a basic taxable profit at any given time. My spreadsheet then calculates a basic tax liability including Federal taxes and Self Employment Taxes. As a baseline I use 35% for my given situation.
> 
> I also have my spreadsheet calculate how much I need to put away for future car repairs I know my car cost me around 30¢ per mile including depreciation. So 30¢ per mile gets put into the car repair/replace/fuel fund. This way I always have money to do repairs and after 5 years I'll have enough put away to replace my car with a brand new car if I continue to drive at my current pace.
> 
> Taxable profits ultimately get placed into a sheltered retirement account to off set my tax liability until retirement. Non taxable profits, the difference between the IRS mileage allowance and my estimated cost per mile gets put into a Roth IRA until my annual contribution is maxed out. Anything left becomes fun money.


So in the end you generally don't owe anything?


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## VanGuy (Feb 15, 2019)

Just going to pay down debt as fast and furious as possible to save interest. If I have to take a little more debt later to pay taxes, fine, I'll pay that down too after.


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## Boca Ratman (Jun 6, 2018)

Stevie The magic Unicorn said:


> On a side note, i'd be shocked if most drivers in most markets owed anything.


Most probably don't but still pay because they don't understand deductible miles.


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## FLKeys (Dec 27, 2018)

Bob Reynolds said:


> How much do you spend per mile just for fuel?


I average 30.4 MPG and our average fuel cost is $2.59 per gallon so that comes to around 8.5¢ per mile in gas. Gas is the least of my worries.



jgraham11 said:


> So in the end you generally don't owe anything?


Technically not, at least until I retire. However I would rather have the money available if something comes up and I don't or can't contribute to my retirement account.


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## MajorBummer (Aug 10, 2019)

jgraham11 said:


> Hi Everyone,
> 
> I was curious on average what people withhold per check when it comes to taxes? I've been withholding around 20% to 23% per check as I'd assume my tax rate won't be that much higher. I pay student loans which helps a lot when it comes to either getting money back or not having to give any money to the government at least. So just curious what the consensus is here on how much to withhold?
> 
> Also, what do you do with it? I actually invest quite a bit of money and I know of a great ETN that pays an annual dividend of 18%. Fairly safe, obviously not as safe as bonds or a money market fund, but you really don't get anything from them. I just don't like the money I'm withholding being complacent and not earning anything.


I save 0 since i always drive 2 miles for every $ earned,therefore wiping out all my earnings with deductions.But thats just me.
Probably not the general rule.keep track of your miles. every mile is a 0.58 deduction for 2019. i saw IRS is gonna lower that for 2020.


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## Older Chauffeur (Oct 16, 2014)

Yep, it’s going to be 0.575 for this year.


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## Smell My Finger (Jun 11, 2019)

kingcorey321 said:


> with holding zero. I claim all my miles driving on uber and times it by 2 and all my other deductions there are zero taxes owned at the end of the year.


Have NEVER had to pay taxes since started driving. The miles offsets every rusted penny I made......


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## Driver Cat (Aug 16, 2019)

Surprisingly driving for Goober/Gryft actually helped to further artificially lower my tax liability for other income from 2019...

I thought I was gonna end up owing for not making any additional tax payments in 2019 but my effective tax rate turned out to be -30% :whistling:


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## Stevie The magic Unicorn (Apr 3, 2018)

Driver Cat said:


> Surprisingly driving for Goober/Gryft actually helped to further artificially lower my tax liability for other income from 2019...
> 
> I thought I was gonna end up owing for not making any additional tax payments in 2019 but my effective tax rate turned out to be -30% :whistling:


Well what that means is that the pennies that Scruber/gryft paid were less than what the IRS thinks an american can run a car on.


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## Jon77 (Dec 6, 2018)

jgraham11 said:


> Hi Everyone,
> 
> I was curious on average what people withhold per check when it comes to taxes? I've been withholding around 20% to 23% per check as I'd assume my tax rate won't be that much higher. I pay student loans which helps a lot when it comes to either getting money back or not having to give any money to the government at least. So just curious what the consensus is here on how much to withhold?
> 
> Also, what do you do with it? I actually invest quite a bit of money and I know of a great ETN that pays an annual dividend of 18%. Fairly safe, obviously not as safe as bonds or a money market fund, but you really don't get anything from them. I just don't like the money I'm withholding being complacent and not earning anything.


Be very careful of a return that high, 18% is frightening, there is a saying if it's sounds too good to be true it most likely is.
A lot of those high return ETN's are 2X leveraged, or are tied to emerging markets, your not getting Apple, McDonald or Coke bonds at 18% return rates.
I've been investing very heavily for the last 20 years, been there done that.
I look for a return of around 8-10 percent, but that is with significant short term risk, anything higher than that and the risk gets astronomical.
You should be ok withholding around 10 percent, your mileage deduction erases most of your tax liability.
Keep very careful records of your mileage, that is pure money come tax time.


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## jgraham11 (Nov 2, 2019)

Jon77 said:


> Be very careful of a return that high, 18% is frightening, there is a saying if it's sounds too good to be true it most likely is.
> A lot of those high return ETN's are 2X leveraged, or are tied to emerging markets, your not getting Apple, McDonald or Coke bonds at 18% return rates.
> I've been investing very heavily for the last 20 years, been there done that.
> I look for a return of around 8-10 percent, but that is with significant short term risk, anything higher than that and the risk gets astronomical.
> ...


I'm actually an ex Financial Advisor, Series 7, Series 66 all that good stuff and I'm in between a career change which I'm why I'm doing Lyft/Uber right now. That world is way too much stress for me so I've backed out. The ETN is actually based on underlining REIT's and the interest they earn that are indeed 2x leveraged. I'm completely 100% equity in the position, no margin and it's backed by UBS which is pretty stable I don't think they'll be going belly up anytime soon. It's MORL in case you're curious. So while it seems too good to be true, it's actually fairly safe. It's not AAA Corporate or Muni Bond safe but I wouldn't put in in the category of Junk Bonds either.


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## percy_ardmore (Jun 4, 2019)

Stevie The magic Unicorn said:


> You PAY quarterly, you FILE anually.
> 
> Direct pay (with a bank account)
> 
> ...


There will be a fee of 1-2 % if you pay online via C card, although you maybe could go to local office to pay but they might still charge service fee. If you have a cashback cc, it still might be worth it.


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## Stevie The magic Unicorn (Apr 3, 2018)

percy_ardmore said:


> There will be a fee of 1-2 % if you pay online via C card, although you maybe could go to local office to pay but they might still charge service fee. If you have a cashback cc, it still might be worth it.


Most markets you won't pay jack, only top paying markets will end up owing anything.


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## Disgusted Driver (Jan 9, 2015)

I have roughly 2k in income on 20k received for rides so I might owe 400 including SSI. Not going to bother for that.


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## tohunt4me (Nov 23, 2015)

Stevie The magic Unicorn said:


> Specically you owe a % on anything you make after any deductible expenses. In most markets it's a great big pile of nothing...


One year . . . i had no Other job.
Did Only Uber all Year !.

Paid Nothing in.
All Year.

Got Money back . . .


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## ABQuber (Jan 30, 2019)

Taaah-xes. I dont understand. Tawxes. What is that word.


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