ima need to fill one out next yr bc in this job i work now i am an independent contractor. so the folks who pay me dont take taxes out. should i be actively setting aside money to pay back next yr? how does this shit work?
15. "go with 25% of each check. " In response to Reply # 2
while your son might offset some of the taxes you owe, good practice would be 25% in the highest interest account you can find, so you can at least earn some money off of it.
8. "If any of this work is at you house...." In response to Reply # 0
Then watch out, your city might make you get a business license if you try to write off your home office as a workplace.
They got a friend of mine with that from a 1099 a year years back and made him pay back taxes and get a business licenses for each of those years retroactively.
What happened to the good old days when a employer would just HIRE YOU and pay the fucking taxes like a good corporate citizen?
9. "set aside money b/c you gotta pay the IRS all at once unless" In response to Reply # 0
they agree to put you on a payment plan for payment of your tax debt. but you may not know about that until after the deadline for on-time payment (April 15).
i was 1099 at 2 old jobs and hadn't saved any money to pay them so i had to file an extension and ask for the payment plan. thankfully it was approved. i paid them monthly for a year and then the remaining debt was paid using my refund for the next year since i had a job that had W-4'd me (aka tax was being w/held from my paychecks). so now it's all good. but i was sweating on April 15 that year when i hadn't saved up and realized i owed several thousand dollars THAT DAY. LOL
21. "if you don't save any money then file your tax return" In response to Reply # 17
EARLY so you can find out about the payment plan option before the deadline for payment in full.
i fucked around and filed on April 15 that year in question b/c i didn't understand that the payment plan option isn't automatic and needs approval - a process that takes several days if not weeks. if i'd filed earlier i wouldn't have needed to file an extension.
i usually hand my tax stuff to my dad who has been using the same accountant/tax man for years. we usually file way before april so i should be good on that end. but its def good to know i should be saving lol
11. "Make sure you are a bonafide independent contractor" In response to Reply # 0
Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?
No shade but some companies just don't want to have payroll tax obligations and put it all on the worker.
30% is a good set aside but you can reduce your taxable income if you are TRUE independent contractor.
You still have my email and number right? ***************************************** Huh??!!
18. "RE: Make sure you are a bonafide independent contractor" In response to Reply # 11
>Does the company control or have the right to control what >the worker does and how the worker does his or her job?
yes. if you don't do things a certain way they can take you off shift, for example.
>Financial: Are the business aspects of the worker’s job >controlled by the payer? (these include things like how worker >is paid, whether expenses are reimbursed, who provides >tools/supplies, etc.)
yes.
>Type of Relationship: Are there written contracts or employee >type benefits (i.e. pension plan, insurance, vacation pay, >etc.)? Will the relationship continue and is the work >performed a key aspect of the business?
there are no benefits. the work performed IS the business. without the workers there is no business.
>No shade but some companies just don't want to have payroll >tax obligations and put it all on the worker.
i was reading about this recently.
>30% is a good set aside but you can reduce your taxable income >if you are TRUE independent contractor. > >You still have my email and number right?
i don't think i have your email. your number should still be in my phone.
34. "it's advised to pay estimated taxes quarterly" In response to Reply # 0
My side gig is a 1099 independent contractor position. I've paid both quarterly and all at once by the January 15th deadline. This link will tell you everything you need to know including the payment due dates and tax rate schedule based on how much you earn, it's not a blanket 20-25%. Just click the link for the 1040-ES form.
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