Independent Contractor - Taxes

[StitchesGr8Fan]

I'm going to be a contractor for a Disney travel agency. The owner told me I will get a 1099-C at the end of the year. I plan to save 40% of any commission checks for taxes. Do I need to pay the IRS quarterly? Or can I use Turbo Tax once a year with my other taxes? This will be a PT job and I don't anticipate making more than $6000 a year. Thanks!

 

[Cheshire Figment]

I would suggest that after you prepare your 2012 taxes that you rework your return to include the Schedule C (or C-EZ) and Schedule SE. See how things look.

If your Estimated Tax will be under $1,000 don't worry about it; there is no penalty for Underpayment of Estimated Taxes if the amount underpaid is less than $1,000. If it looks as if it will be more, then make Estimated Payments.

Mike (CPA Retired)

 

[ilovemk76]

I would suggest that after you prepare your 2012 taxes that you rework your return to include the Schedule C (or C-EZ) and Schedule SE. See how things look.

If your Estimated Tax will be under $1,000 don't worry about it; there is no penalty for Underpayment of Estimated Taxes if the amount underpaid is less than $1,000. If it looks as if it will be more, then make Estimated Payments.

Mike (CPA Retired)

You could also adjust the w4 offhe worker to pay the taxes that way.

 

[Ginny Favers]

I make the same amount on my Schedule C as I do with my regular full-time job. I used to pay taxes quarterly but I had a hard time estimating when I'd be getting money in, since payments weren't consistent. Now I just claim no deductions on my w4 for my full-time job, and things end up balancing out.

 

[Diegosmom]

Hubby is self employed and I just claim on my w-4 0 dependents (or I think I just changed it to 1 for our family of 3) and at the end of the year we still get money back (we have a kid, daycare expenses, mortgage interest and school loan interest)...so it works out fine for us.

Our CPA told us as long as we didnt owe more then $1000 each year we were fine to do it this way but if we start owing more we would have to pay quaterly...

 

[StitchesGr8Fan]

I'm thinking of adding $50 extra withholding each month from my FT job to cover taxes for the travel agent job. I won't do that until I book my first trip though!