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I have a sole proprietorship and I'm helping out a friend. We have an agreement where I told him what I needed to net each month and I can invoice for that.

If I need to net $6000 each month, how do I calculate the gross amount that needs to be invoiced so I can end up netting $6000?

I've seen a lot of calculators on line for the self employment portion, but also need to factor in state (CA)/fed income taxes, as well as anything else I might be missing. This doesn't need to be exact, I just want to be able to generate an invoice for more than $6k so that by the time I pay taxes on 2019, I will have taken home the $6k that month.


UPDATE

Here's what I've tried so far:

Calculate Self Employment Tax

(6,000 * .9235) * .153 = $847.77

Calculate Income Tax

(6,000 + 847.77) * 100/(100-12) = $7,781.56

I would need to invoice for $7,781.56

Am I getting close with this line of thought?

  • Do you have other income? – Hart CO Feb 12 at 0:05
  • This depends on the applicable tax percentages. If your marginal tax rate is p%, then you want x*(1-p/100)= 1000, or x = 1000*100/(100-p) – Hagen von Eitzen Feb 12 at 0:05
  • For these purposes, no, I will not have other income. – djibouti33 Feb 12 at 0:06
  • @djibouti33, that's not how taxes work. Other income is required to determine which marginal tax bracket this income will fall in to. – quid Feb 12 at 0:14
  • @quid, absolutely. I meant to say I won't have other income outside what I'm billing my friend, so I can project for 12 months to calculate my marginal tax rate. – djibouti33 Feb 12 at 0:19

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