How do you pay Federal taxes as an independent contractor?

Question

Do you pay estimated taxes quarterly?
Must you incorporate?

Answer 1

If is not required that you incorporate.

About estimated taxes, here is the info
You must pay estimated tax for 2007 if both of the following apply.
1. You expect to owe at least $1,000 in tax for 2007 after subtracting your withholding and credits.
2. You expect your withholding and credits to be less than the smaller of:
*90% of the tax to be shown on your 2007 tax return, or *100% of the tax shown on your 2006 tax return. (110% if your AGI is more than $150,000 or $75,000 for married filing separately). Your 2006 tax return must cover all 12 months.

So most of the self employed people make quarteryly payments equal to one fourth of the tax for the previous year. So if you pay minimum amount (including withholdings) equal to 100% of your 2006 tax return, then you are safe.

For the 2008 also, divide your taxe for 2007 by four and send quarterly payment equal to that amount

Answer 2

As an independent contractor, you don't need to incorporate, but should be making quarterly estimated payments to avoid penalties for underwithholding.

Answer 3

you pay estimated quarterly taxes
you must have paid in 90% of your tax burden so as not to get a penalty + interest

Answer 4

Find a good tax accountant.

You will save money in the long run.

Answer 5

you get an EIN [employer identification number] [free from irs] and make periodic deposits of your taxes at your bank.

depending on the amounts of the taxes, including FICA and unemployment, you'll have to amke deposits anywhere from annually down to weekly [for large employers only].

IRS.gov website will get you started