Estimating deduction based on computer purchase?

[stanw]

I have a side business that I do independent contract work with, and I'm going to need to purchase a new computer for around $3,000. Sorry for having to ask this, though how do you calculate how much of a deduction $3,000 will have on my taxes. I know there might be lots of factors involved, though is there a way to get a good idea of how it will affect my taxes?

Thanks.

[mwcpa]

What tax bracket are you in?
are you above the FICA threshold?
do you live in a state with an income tax?  What was your tax bracket last year.

I will make a guess... 30%..... If you live in a high tax state, maybe 35%..... If you pay "se" tax (15.3%) then 40-45%.  Lots of variables... Wide range.....

[stanw]

Thank you for your response.

I live in California (income tax state) and am in roughly the 18% tax bracket.

What is the FICA threshold?

[stanw]

Thank you for your response.

I live in California (income tax state) and am in roughly the 18% tax bracket.

What is the FICA threshold?

[mwcpa]

What is the FICA threshold?

$113,700.  (employees pay 6.2% of that via a withholding tax.... the self employed pay 12.4%)

Medicare has no cap (employees 1.45% and self employed 2.9%)

Based on your income tax bracket you are probably below the threshold... and Cali is a high tax state....

[stanw]

I am married and we file jointly, so our combined income is above $113,700.

[mwcpa]

the FICA threshold is on an individual basis not a married basis.  the FICA threshold is applied to wages and earnings from self employment, so, more than likely you are subject to full SE tax on the net earnings from this side business.