Working for an Independent contractor,How much do I claim on my taxes?

Question

Working for an independent contractor, they pay me 150.00 an hour with a max of 12 hours per week. How do I figure my taxes on that

Answer 1

As an independent contractor, you will have to pay in the full self employment (SE) tax amounts, currently 15.3%, unless your income from that activity is over the social security limited (some where around 90,000).

Along with the SE tax, you will have to pay income taxes.

If you have a lot of activity and expenses (like the expenses listed above) it will be well worth your time to consult a CPA. Now is the time to make that contact, build your relationship and figure any year end tax planning. And, if this is your only income activity, the full accounting fee can be claimed as an expense.

Good luck!!

PS - I would try to set aside around 25% of your checks for taxes.

Answer 2

If you are working FOR an independent contractor, you are an employee and your employer should withhold taxes as any other employer would. If you are working AS an independent contractor, consult a CPA to show you how to handle your taxes the first time at least. Independent contractors pay 15.3% self-employment tax (equivalent to both halves of social security tax) in addition to income tax at regular rates. These are based on net income not gross. Any work related expenses are deducted before self-employment and income taxes are determined.

Answer 3

Hopefully a CPA will answer that question for you. I have worked as an Independent Contractor before and try to put a minimum of 35% in a bank account for tax purposes. Remember you should keep track (and receipts) for all expenses related to the job. they are tax deductable. Example, Car usuaage & mileage, clothing, telephone etc.
On the lite side I know of a lady that claims she is an independent contractor and is active in the worlds oldest profession. Does she pay taxes??? Who Knows!