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You should talk to an accountant to figure out what your specific situation will be. I have been a 1099 for the last 6 years and I got an accountant in year 2 because it was way too hard alone. I'm guessing the 40% was just an over-estimation to make sure that you're covered.... but that could be right if your husband will be a high earner.

For me, my taxes = my federal tax rate + my state tax rate + my local tax rate + 6.725%.

So basically it is what I'd pay with an employee job, + a flat 6.725%. That part is the "employer" contribution to social security, because when you're a 1099 you are both the employee and employer.

Also though, depending on the type of work, you may have more deductibles since he will be self employed.

I have no idea personally, but I wanted to bump it for you! Good luck!

I'm self employed and pay estimated taxes! 40% is a lot. The rule is to either pay in 100% of your previous year's liability, or 90% of what you expect that year's liability to be.

BUT, I highly suggest getting someone to do them for you the first year at least. I got an accountant, though she didn't do a good job. The second year I went to HR Block who sits there with you, putting everything into the computer while explaining it all to you. It was so helpful, it made me confident preparing it myself that year. There is no obligation to file once you go through it all with them, so you can walk out of there for free if you aren't "happy" for some reason. I wasn't happy with the high fees they wanted to charge me for it (they couldn't give an estimate beforehand), so I walked out of there free with the agent's blessing since he agreed it was really high. From there, I took my new knowledge to TurboTax and have been using it ever since.

Honestly I think the 40% number is about right.

Technically, the taxes really depend on your income bracket, (basically whatever you would usually have withheld from your paycheck plus the employer side of SS and Medicare).

BUT the difficulty in self-employment taxes is having the discipline to always set aside enough money, which is probably where the 40% figure comes in. After your first year of quarterly payments, it is recommended you pay a little bit more the following year's quarterly filings (in case your income goes up so you don't end up owing). If you overpay, obviously you get that back in the form of a refund.

Another part of the 40% is having enough set aside to pay for your accountant. It is SO helpful to have one, I cannot stress that enough. It really is very complicated and they can get you all your deductions worked out for you and advise you on self-employment retirement options, etc.

We use our accountant to do our tax filings in April, and then we pay them hourly to do a quick check-up on us in September to look over our books and see if we've been saving/paying enough based on what we've made so far that year. Our first year we had been saving 33% and we found out we were going to be short. Luckily, we had 6 months to save up the difference before April so it wasn't a huge shock later on.

@allison: Click on the link above to get to this worksheet.

http://www.irs.gov/pub/irs-pdf/f1040es.pdf

General Rule
In most cases, you must pay estimated tax for 2014 if both of the following apply.
1. You expect to owe at least $1,000 in tax for 2014, after subtracting your withholding and refundable credits.
2. You expect your withholding and refundable credits to be less than the smaller of:
or a. 90% of the tax to be shown on your 2014 tax return,
b. 100% of the tax shown on your 2013 tax return. Your 2013 tax return must cover all 12 months.
Note. These percentages may be different if you are a farmer, fisherman, or higher income taxpayer. See Special Rules, later.
Exception. You do not have to pay estimated tax for 2014 if you were a U.S. citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. You had no tax liability for 2013 if your total tax was zero or you did not have to file an income tax return.

@allison: Try to work your way through the worksheet i just posted. It really shouldn't be that hard to go line by line to try to get an idea of what you'll owe (assuming you have a good idea on his estimated earnings). Most of this is basic addition and subtraction to just get to a ballpark estimate, you really may not need an accountant (but I understand if you want someone to double check it all).