I was working at a regular job from Q1-3 then started working as a contractor and just learned that I should make a DBA, is it too late? How should I file this year?

[nataortega]

I was working a regular job at a supermarket and just started to work for a company as a contractor in Q4, I didn't know I could or should make a dba, what's my best option now that the year is basically over? 

[VolvoGirl · Accepted solution]

Having a DBA or not doesn't matter on your tax return.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

You need to report all your income even if you don't get a 1099Misc. You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

After it asks if you received any 1099Misc it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records.  Just go through the interview and answer the questions.   Then you will enter your expenses.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

Here is some IRS reading material……

IRS information on Self Employment
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf

[VolvoGirl]

You will need to keep good records.  You may get a 1099Misc at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep tract of your income and expenses.  

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....
<a rel="nofollow" target="_blank" href="http://quickbooks.intuit.com/self-employed">http://quickbooks.intuit.com/self-employed</a>

ABOUT PAYING ESTIMATES
The first year you don't need to pay estimates as long as you pay in (by withholding) as much as your tax was last year.  But if you will have a big income you should send in estimates so you don't owe too much next April on your tax return.

You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, 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 current year’s tax return, or
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

[TomYoung]

"DBA" means Doing Business As and there's no reason why you really need a DBA if you're simply working as an independent contractor.  You can certainly operate your business using your own name.

Perhaps what you are actually thinking of is Estimated Taxes?  Those are the quarterly tax payments you might need to make when you work as an independent contractor and there's no taxes withheld from the income you receive.  You MIGHT need to make the 4th quarter's estimated tax payment, due 1/15/18, depending on your circumstances.  As soon as you can after 1/1/18 enter ALL the information you need for your 2017 income tax return - you might have to make some estimates but at that point you should be working with fairly accurate numbers - and see if TurboTax tells you that you could be subject to an underpayment penalty.  If it does then you can fill out a Form 1040ES by hand

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

(the forms themselves are in the last few pages of the pdf)

and mail it in, with a check.

If TurboTax tells you that you're not subject to underpayment penalties then no estimated tax payment is necessary.

Tom Young