How do you pay income tax?

Question

Well I work for myself and I have no idea how taxes work. What kind of forms do I need? When do I need to pay them? What information do I need to get ready(all my sources of income and expenses)? Is it possible to pay online?

I'm 18 and I live in Texas.

Answer 1

Your self-employment income is reported on Form 1040, Schedule C (PDF), Profit or Loss from Business, or on Form 1040, Schedule C-EZ (PDF), Net Profit from Business.

Your Medicare and social security taxes are reported on Form 1040, Schedule SE (PDF), Self-Employment Tax.

As a self-employed person, you pay your Medicare and social security taxes the same way you pay your income taxes. If you expect to owe less than $1,000 in total taxes, you can pay them when you file your income tax return. If you expect to owe $1,000 or more in total taxes, you will need to make estimated tax payments. These payments are made quarterly using Form 1040-ES (PDF), Estimated Tax for Individuals. You will need to figure these taxes at the beginning of the year. To learn about figuring and making estimated tax payments, please refer to Publication 505, Tax Withholding and Estimated Tax.

References:

* Form 1040, Schedule C (PDF), Profit or Loss from Business
* Form 1040, Schedule C-EZ (PDF), Net Profit from Business
* Form 1040, Schedule SE (PDF), Self-Employment Tax
* Tax Topic 554, Self-Employment Tax
* Publication 505, Tax Withholding and Estimated Tax
* Form 1040-ES (PDF), Estimated Tax for Individuals

Answer 2

I have to disagree with you even though I do pay a lot of income taxes. Your right to vote should not be eliminated because of your economic status. If you disagree with the current tax system let it be known by voting for candidates who share you belief that the tax system is wrong and needs to be fixed. Also contact your congressman and senator and let them know your view. I do not mind paying my taxes. I do not mind paying more if I earn more. What I do mind is people who want to demonize me for my success. A flat tax or a national sales tax would be a much better system than the current tax code. To start it would be a simple code instead of the thousands of pages in the current code. Second it would close the loopholes in the current system that allow some rich to avoid paying taxes. Third and most important it would mean every one would have some skin in the game. Finally if we all had to pay an equal % in taxes how many people who currently do not pay taxes would not agree with the idea of higher taxes

Answer 3

How could you top tampico's answer? A few more things - you will need documentation of all income received and any business expenses, as these are deductible. In many states you can pay online, but not necessarily all. You can file online for federal taxes. In your situation, I suggest consulting a tax preparer. It can get tricky to properly represent your income and expenses and hiring a preparer is cheaper than having an audit.

Answer 4

Profit/loss from Business-Schedule C
Self Employment Tax- Schedule SE form 1040
Individual Income Tax Form
W-2 or Form 1099 Misc- from work
Good luck!

Answer 5

It depends are you a business or contract worker? How do you get your money? You can file online but you must still send the payment in. I think that for you, at least for the first few years get your taxes filed professionally. You will be able to deduct the cost of filing on next years taxes anyway, and you won't need to fear being audited.

Answer 6

Not sure if any of this is going to help. My husband owns his own business and we have to pay sales tax every 2 months. For our federal taxes, we pay once a year like most everyone else. There are special forms that you need to fill out in addition to your 1040. As for your state taxes, I would check out this link and see if it does you any good. I will also paste the link for the IRS site too. Sometimes, on the federal level, you need to pay your taxes quarterly. I am really sorry if I have completely confused you. If you would like any additional help, please feel free to email me as I do the taxes for my husbands business, both state and federal.

http://www.state.tx.us/

http://www.irs.gov/

Answer 7

You;ll get your w-2s from your employer after jan 1. Taxes are due by April 15th