Ok so I do not get taxes taken out because I am an independent contractor......does that mean i have to pay quarterly taxes? or how is this supposed to work?
2007-04-03 15:25:04 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ Other - Taxes
So if it is an estimate does that mean that it has to be exact or can it be a small amount one time and large next.....thanks for the help i am very new to this whole IC thing
2007-04-03 15:58:09 · update #1
If you expect to owe more than $1,000 in taxes, you should be paying quarterly estimates. You can file with Form 1040-ES by mail, or you can pay your estimated taxes online, using EFTPS. Estimated taxes are an estimate, but if you dont pay in enough, you can be subject to an underpayment penalties. Check out the IRS site and click on EFTPS for more information.
http://www.irs.gov/efile/article/0,,id=98005,00.html
2007-04-03 16:24:49 · answer #1 · answered by tma 6 · 0⤊ 0⤋
Honestly, it depends on how large your income (or AGI specifically) is. Your best starting point would be to read through the instructions for Form 1040-ES, the federal estimated payments.
From there you can see if you are allowed to safe harbor, meaning pay a certain amount of estimated tax and avoid penalties (like paying 100% of the prior years' tax).
Best of luck!
2007-04-04 09:31:47 · answer #2 · answered by Molly 6 · 0⤊ 0⤋
yep,, you pay tax estimates on form 1040ES each quarter.
You would be paying federal tax, & social security tax
might need to file a state estimate also
Self Employment tax is almost 15 1/2 % plus whatever federal tax bracket you are in.
due 4-15-2007
6-15-2007
9-15-2007
1-15-2008
2007-04-03 22:30:49 · answer #3 · answered by Jo Blo 6 · 0⤊ 0⤋
If you want to avoid paying penalties, then you should make quarterly estimated payments.
2007-04-03 23:56:10 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
In addition to form 1040-ES, you might read pub 505.
2007-04-04 10:41:23 · answer #5 · answered by CarVolunteer 6 · 0⤊ 0⤋