What are the general guidelines for filing taxes for someone who is newly self-employed?

Question

(State of Florida, Country of USA)

WOAH! Slow down CPA's! Perhaps I should clarify: I didn't open a business. I'm working under-the-table for a collection agency and since they're paying me in cash (base plus commissions) and not reporting my income, I know I have to file on my own. That's all.

Answer 1

You can do one of two things. Depending on the amount of income received under the table. If it is less than $600. by the end of the year it can be included under "Other Income" on the 1040 form. More than $600. I you will file a Schedule C and any gain after expenses will be included in your gross income for federal income tax purposes and as well is subject to Social Security tax with is the social security and medicare not taken out of the check (like a check on the books) would have. So, you would file a 1040, Schedule C, Schedule SE.
If the amount paid is enough to cause you to owe more than $1000. at the end of the year, you should be making estimated tax payments on a quarterly basis.
Hope that helps. You may want to go to a tax pro and get some specific advice for your situation.
Good Luck!

Answer 2

Congrats on starting your business. First you should understand that you should now be keeping all your receipts for expenbditures relating to your business. I suggest getting an expandable folder (one with multiple pockets) and put them in each for the type of expense. Keep a mileage log (date, destination and miles) so you can deduct the use of your car. Open a separate bank account (don't tell the bank its a business account, usually bus accts are more expensive), get separate phone line, get proper business licenses for your area. All these will help you avoid the hobby loss rules if you are not profitable in the first few years.
You will file on Sched C of the 1040. Most computer programs will be able to help you with it. If you are totally unsure of how to do it, have a professional do it the first year. Good luck.

Answer 3

OK, some good news and some bad news. The good news: you are working for yourself. Generally speaking, that means you are in full control over how much taxes you pay. The bad news: you get to pay both the regular income tax and the self-employment tax.

I wrote up a 5-page article with plenty of tax tips for independent contractors and freelance professionals. This is the sort of information I tell all my clients. You need to get organized, hire a competent and trustworthy tax professional, and start planning for the future. Yes, planning is the key. It can make or break your life. Freelancers who plan ahead pay far less taxes and those who don't. I see this first-hand with all my clients, and that's why I create a tax strategy for each client so that can begin to lower their taxes legally and with plenty of backup documents.

Make sense?

Answer 4

You almost easily will favor to document a Federal income Tax go back next twelve months. there is absolute self assurance about that. As to the state, i ought to assume that you're going to favor to document an annual income tax go back which includes your State branch of gross revenues and document your total income for the twelve months and that you would possibly want to be able to take a credit for the quantity of taxes you've already paid in the course of the twelve months. Do you've an self sufficient accountant operating for you? if so, you may favor to ask him or her this question, or if you're holding your own books, call your State branch of gross revenues and communicate to someone there. i'm particular that someone operating for this place of work will make the attempt to describe the technique extra ideal than i will, pretty even as i do no longer stay contained in the State of Washington.

Answer 5

The truth is, it depends on which type of tax you are referring to. Most people will assume you mean income taxes, but you may also be liable for sales tax, personal property tax, or payroll taxes.

The best "general" guidelines you can get for income taxes is in:
http://www.irs.gov/formspubs/index.html?portlet=3. Find Publication # 17.

Answer 6

usually you have to file a schedule c for self employment and report your income and expenses. and a schedule se for self employment tax.

Answer 7

MAKE AN APPOINTMENT TO SEE AN ACCOUNTANT THE FEE YOU PAY IS TAX DEDUCTIBLE. MOST IMPORTANTLY KEEP EVERY RECIEPT THAT YOU HAVE PURCHASED ANYTHING HAVING TO DO WITH YOUR BUSINESS, GAS MILEAGE, PAPER, PENS, EVERYTHING.

Answer 8

CPA