I'm starting an LLC in Illinois (software consulting) and I'm the only member in the business. I'm trying to figure out what wage to pay myself that will ultimately cover my personal expenses after all other expenses/taxes get paid. I'm trying to work backwards starting with my monthly expenses.
So, let's say for example:
Personal Monthly Expenses = $5000 Business Monthly Expenses = $500 Social Security Tax = 6.2% + 6.2% (employer and employee) Medicare Tax = 1.45% + 1.45% (employer and employee) State Tax = 3% (not sure exactly) Self Employment Tax = 15.3% Hours worked = 160
Given the above, what should the minimum billable rate be? If I'm missing any details I would appreciate a comment.
I think I want to keep the calculations simple. Meaning, I don't want to worry about taxes that have a maximum cap or taxes that change based on an income/revenue range.