I just started working from home and just this week started to get paid. I'm going to be making around $1000 to $1500 a month. I've never been self employed before so I don't understand what I need to do about taxes. How do I send in quarterly or monthly tax payments so I don't get hit with a big tax bill at the end of the year?
2007-10-30 23:17:15 · 4 answers · asked by Salem 1 in Business & Finance ➔ Taxes ➔ United States
Form 1040ES from the IRS deals with this. I am also self employed. I set aside a portion of my earnings in a savings account each month, and then make quarterly estimated tax payments on the schedule set out by the IRS. After the first year, they will send you vouchers in the mail with the dates already on them, etc. to make it easier to keep track of.
2007-10-30 23:22:09 · answer #1 · answered by Jessica 2 · 0⤊ 0⤋
There's only one quarterly deadline left for 2007 taxes - that's 01/15/08.
Is this your only income for the year? And are you single, or married filing a joint return? Any dependents? Those answers would matter as to how much tax you'd owe.
You don't say if you have any associated deductible expenses in making that money. If the amount you show is net of expenses, and you don't have other income and don't file a joint return with a spouse who does have, and don't have any dependents, then you'd owe around $300-$450 for self-employment tax (social security and medicare) for the year on income of $2000-$3000, and no income tax. You'd send that in along with a form 1040ES by January 15. The amount is low enough that you won't be penalized if you just send it in with your return when you file.
In 2008, if you are working the entire year, you will owe income tax as well as the self-employment tax so will have to make quarterly payments.
2007-10-31 11:05:57 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
you will need to pay in federal and state tax which together will be around 33 % of your pay (or was when i had to send them in) best thing to do is talk to your tax preparer they can give you the coupons to send along with your payment, or you can probably buy a program that will figure your taxes for you
2007-10-31 06:24:38 · answer #3 · answered by autumn 5 · 0⤊ 1⤋
Make sure that you mark the correct boxes on everything and if you send checks, don't bounce. I worked for a CPA and we had a client and he did both. It was so messed up the IRS couldn't figure it out. Would you believe he was in state congress. lol.
2007-10-31 06:32:55 · answer #4 · answered by Heart of man 6 · 0⤊ 1⤋