How do you pay taxes, s.s.,insurance, etc. in the U.S.(FL) as a self-employed contractor? Is there a website?

Question

For some time,It has seemed that the only way I could earn what I'm worth around here(FL), and make ends meet, was to do side-work, Now that has become full-time and then some. I can do almost unlimited work as a diesel mechanic for a small co. that wants to pay me by the job very well but as a contractor. I would like to find instructions on paying taxes, s.s, comp.?,unemp.?, incorporation, licensing, etc., to make this a legal and more secure thing to do full-time. I know a lot of other tradesman do this, plumbers, carpenters, painters, etc., but I was hoping for a website or association so I can work on setting myself up in business at night while I'm off. I'm particularly worried about getting injured in a work accident. Also any information preparing towards a business loan, towards more equipment and tools later would be helpful.

Answer 1

If you have no employees all you need for insurance is liability coverage. Workers comp insurance is expensive and only covers injuries on the job. You will have better coverage for less money if you buy health insurance and disability income insurance. If it is a mobile service you will want commercial insurance on your truck. You will need to make quarterly payments to the IRS for your income tax. Social security is covered by the self employment tax. Keep records of all expenses. A separate checking account for the business is the easiest way to do this. Every dollar you earn from your business gets deposited. Every business expense gets paid for from the same account. What is left in the account is profit. When you take cash from the account (paying yourself) set 25% into a savings account to pay your taxes. Talk to an accountant about setting up a simple bookkeeping system. A one write checkbook is probably all you need.

Answer 2

Was there any change in your duties when you became a self employed contractor or are you being cheated out of benefits by your employer? I have a canned explanation I post constantly for apparently clueless independent contractors: Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. The basic issue is the amount of control the employer has over the worker. If you are required to show up for work--personally--at a particular time, punch the clock, use the employer’s equipment and are paid an hourly rate, or another set rate based on time served, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired. When you file your income tax return, you can attach Form 8919 Uncollected Social Security and Medicare Tax on Wages and only pay the employee's half of social security. You will still have to cough up all the income tax. IRS and the states are stepping up enforcement in this abuse area.

Answer 3

You want a lot of information for one question. It is really about 5 questions. For state requirements check with

http://www.myfloridalicense.com/dbpr/

The IRS requires quarterly payments of estimated tax. You can get the forms and instructions at

http://www.irs.gov/formspubs/

As an independent contractor, you do not need to incorporate. You can operate as a sole proprietor. You file your business operations on Schedule C of your federal tax return. Form 1040 also includes provisions for paying your Social Security and Medicare tax. There is no web site that can help you with all of these things, but there are lots of different web sites that deal with many of these issues. Search on key words such as workers comp, liability insurance, unemployment, etc.

You should have simple accounting software to keep your accounting records. Programs like Quickbooks or MS Money work well. More sophisticated are DacEasy or Peachtree.

Keep good records and when you need a loan you will have information to present to the bank. You may not be able to handle all the paperwork alone, in which case hire a local CPA to help you. A CPA can guide you in most of these matters.

Answer 4

Contact the states web site. Its usually secretary of state or some thing like that. They can give you contacts for setting up a LLC. In addition, you can contact a local SCORE chapter who can help you with a business plan that can help with a line of credit facility at a bank.
As far as injury, your insurance agent can help with getting work comp insurance.

Answer 5

Check the state website. They should have the info for what you need. Or call.
In some states you have to pay quarterly.