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Commercial-Pair-3593 OP t1_j6kqa78 wrote

Reply to comment by theoriginalharbinger in LLC and W2 earnings an income tax question. by Commercial-Pair-3593

Sure but the tax rate does start/stop/change. So my job puts me at 22% tax rate and so my business is automatically starting at 22% after deductions. If I made less money at my day job business income would only be taxed 10 or 12 percent. So I need to charge more per item to account for this.

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kveggie1 t1_j6krq72 wrote

after expenses... The net profit of the side hustle is added to the top of the 9-5 job.

You charge what the market will accept as the price.......

Also you owe 15.3% for FICA.

Also you owe state tax (if your state has income tax).

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Commercial-Pair-3593 OP t1_j6ktqwv wrote

I'm aware of the 15.3 and that I can deduct half from the income tax.

There is no state tax here but a $25 yearly filing fee.

I'm an engineer developing unique products, if the price is estimated to be higher than I think the market will accept then I will not develop that product. 10% is the entire profit margin or more than for some businesses so I hope you can see why that makes a big difference.

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