whine

[mamajoan]

I am really annoyed by the fact that I have this supposedly great job and all, and yet, I'm still broke and unable to pay the bills.

The problem is a combination of factors. Because I'm contracting, I only get paid once a month. I submit an invoice on the first of the month, for the previous month, and get reimbursed.
a) I only worked six days of February so that check was small
b) I submitted my invoice for Feb on March 1st, but didn't get the check till March 15th
c) and then the money didn't actually get into my account for another week-plus, because checks over a certain amount take longer to clear.

And I have several very large bills due this week or in the very immediate future. So although my next paycheck should be over $8000 which is plenty big enough to cover everything, I still can't actually pay those bills, because I don't know when I'm going to GET the $8000. I put in my invoice promptly on Monday, but the financial guy has not actually been here all week (vacation?) so I have NO idea when I'll get that $8000 and meanwhile the bills are piling up. I just borrowed another $2000 from my mom and now am thinking I should have made it $3000 or even more just to cover everything I have to pay before the damn paycheck actually gets into my account.

If I were on salary as a permanent employee, I'd have direct deposit and none of this would be an issue. And people wondered why I didn't want to do contracting. ARGH.

Comments

[whuffle.livejournal.com]

Yeah, this is the problem with being a contractor. You have to submit your invoice the minute you finish the job and sometimes the client doesn't pay up for 30 days. I once had a client that didn't pay up for 6 months. When they called to ask me to do another job I said, "okay, but this time you are paying me premium rates and if I don't have cash in my hand from that last job the minute I show up, I'm going to walk out on you!" I used to hate the stress of paying bills when my clients weren't paying me on time. I hated being out of money and I hated resenting my clients because I couldn't depend on them to pay me in a timely fashion.

[mogwar.livejournal.com]

Since you only have the one small invoice for February that was paid before 31 March, you can probably get away with not paying any taxes for first quarter, but you might want to set aside some money from the next checks you get. If you are making $8000/month, you'll probably owe at least $4000 in estimated taxes come June, and if you don't make your estimated payments, IRS will charge you some hefty penalties next spring.

[mamajoan.livejournal.com]

Yeah...that whole estimated tax thing. I've been reading about it on the IRS website and I'm really confused. Maybe I should just email you.

[mogwar.livejournal.com]

It's not that hard. Figure out how much money you made for the period in question (my brain is pretty fried right now, but I believe that 2nd quarter will be made up of April & May - estimated tax quarters are not even and it's all screwy). Then you multiple that amount by your estimated tax percentage to get how much your tax payment should be.

The tax percentage can be a little difficult to figure out. First, there's a flat 15% (15.3% to be exact) for FICA/Medicare. Then add another 10%+ for Federal taxes (if you think you're income might be roughly the same as last year, the easiest way to get this percentage is to divide your 2006 tax paid by your 2006 taxable income - often times tax software will give you this number, just use the average tax rate and not the marginal one).

That's what you send the feds. The state gets a chunk, too, but I don't know MA's income tax policies well enough to tell you how to figure their payment amount without looking it up. But if you want, you can email me and I can give you more specific help - especially if you don't mind waiting until May. :P