![]() Sure, the thought of paying your taxes may not be the most pleasant one, but Keeper Tax is here to help make it a little more tolerable and has compiled a quick checklist that might help you when tax season rolls around. Unlike independent contractors, employees generally pay income tax and their share of social security and Medicare taxes through payroll deductions (withholding).If you are working as a Wonoloer, you’ll likely be responsible for filing your estimated 1099 self-employment taxes throughout the year. For more information on estimated tax, refer to Publication 505, Tax Withholding and Estimated Tax. If you are required to but do not make timely estimated tax payments, the IRS may assess a penalty for an underpayment of estimated tax. However, you may be subject to the requirement to make quarterly estimated tax payments. Generally, there's no tax withholding on income you receive as a self-employed individual as long as you provide your taxpayer identification number (TIN) to the payer. Use Schedule SE (Form 1040), Self-Employment Tax to figure the tax due. Most self-employed individuals will need to pay self-employment tax (comprised of social security and Medicare taxes) if their income (net earnings from self-employment) is $400 or more. Generally, if you're an independent contractor you're considered self-employed and should report your income (nonemployee compensation) on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship). If you would like the IRS to determine whether services are performed as an employee or independent contractor, you may submit Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Also, refer to Publication 1779, Independent Contractor or Employee PDF.
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