Brand new as a sole proprietor contractor this year

[Thekev]

I actually have quite a few questions but primarily I suppose where is the best place for me to go to learn / gather information on how to treat home office expenses and any other expenses like self-paid insurance etc? I will have to start learning these things. I have taken a look at the IRS website but perhaps there's better advice here too. And or maybe something specific that I should be looking for on the IRS website.

Thank you! 

[VolvoGirl]

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

Publication 587 Business use of home

https://www.irs.gov/pub/irs-pdf/p587.pdf

You need to fill out schedule C for self employment business income and pay self employment tax in addition to regular income tax on it.  The SE tax is to pay Social Security and Medicare tax that wasn't taken out like on a W2.

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax.  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.  

Turbo Tax guide to Estimated taxes

A Guide to Paying Quarterly Taxes - TurboTax Tax Tips & Videos

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).

[KarenL4]

Hi, Thekev,

First, let me introduce you to TurboTax's Self Employment Hub! It has some great resources.  Here's specific links to the items you mentioned:

• Home office
• Self-employed health insurance

While you didn't ask about it, I also want to make sure you have line of sight to self-employment taxes and estimated tax payments. We get a lot of calls where folks were blind-sided about the need to pay self-employment taxes in addition to income taxes.  Hopefully, this information will all help you succeed!

Not sure if you saw this self-employment hub with the IRS, and am also adding it in case you didn't. They actually have a lot of great info there, too!

Hope this helps.

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Regards,

Karen

TurboTax Expert