I just start new job self contractor. How do I pay SS and med. care?

Question

Hello everyone. I left my job and am now providing self contractor services. I want to know how will I be able to pay Social Security and Medical Care. Like same thing you pay on your regular paycheck from a job.

Can anyone give me some information?
thank you very much

Answer 1

If you are self employed aka an independent contractor, you pay what are called self employment taxes that equal the employee and employer portions of Social security taxes for an employee. You are supposed to make quarterly estimated payments for your federal taxes. The link below contains links to IRS publications and forms for the self employed.

Answer 2

You are very fortunate you began this at the end of the year. You will settle up your SS and medicare taxes when you file your tax return. I recommend you file early so you see it's effects on your taxes. You may have to make quarterly estimates & the first one is due April 15th (then June 15, Sept. 15 & Jan 15).

Basically when you are a subcontractor, you are responsible for the employer's portion and the employee's portion (approximately 15%). But you only have to pay it on your "net" income (minus business expenses).

So, file early so you can properly plan for 2007. Also in case you may owe more than you are anticipating, which will be due 4/15, and that you may have to make an estimated payment by 4/15.

Just remember, when you are a subcontractor NO EXPENSE IS TOO SMALL TO KEEP TRACK OF!

Answer 3

When you do your income tax return at the end of the year, there will be a line for self-employment taxes - this is basically the employer and employee halves of social security and medicare. You'll include a schedule SE with your return - this is the form to use to figure your self-employment tax, then the amount will transfer to your 1040. The self-employment tax will be 15.3% of your net income from your business.

To pay it, you'll need to make quarterly payments to the IRS which will include your expected income taxes plus self-employment taxes.