hello
my husband and i are doing locums in various states. we are reidents of virginia, and our income was in the 40000-45000 range. we rented our town home and did a locum earlier this yr.
1. our estimated taxes are 3600 each quarter...this seems high to me. this is in addition to the state taxes we are paying in different states- massachusetts,maine. please advice.
2. what is the tax structure for 2010 for state of maine(non resident).

thanks.

Zip Code: 04401

Good questions.

For the federal taxes on your Locum Tenens income, you ask if $14400 in federal income taxes seems high on $40k of income. I think it's important to remember that when you work as an independent contractor (versus working as an employee), you need to pay your Social Security and Medicare taxes as part of your federal tax return.

When you work as an employee, your employer withholds Social Security and Medicare taxes at a rate of 7.65%, and then matches the amount withheld, so the federal government gets 15.3 cents on each $1 you earn. When you're self-employed, the government still wants this 15.3% tax. You now pay this tax as part of your federal income tax return. On $40k of Locum Tenens income, you will pay about $5650 in "self-employment" taxes.

So out of the $14.4k you are paying in federal estimates, $5,650 is not actually for your federal income taxes. That leaves $8750 being paid in on $40k of income. If you have no other income, that does sound a little high. If your spouse is working and has income, then paying 20% of what you earn to the federal government probably sounds right.

With respect to your question about Maine, they will tax you as a non-resident on the income earned while working in Maine. I'm not sure I understand what you mean about their structure.

I hope this answer helps you out.

Zip Code: 01801