I have an opportunity for a short-term, full-time contract role in California. The salary for the 3-month contract will likely be less than $50k. Is it best to just set aside the 15% for federal taxes to pay as a sole proprietorship or open an LLC? As a contractor, do I pay taxes quarterly? If the contract were to be extended and I were to make more than $50k, I understand there could be tax benefits to opening an S Corp.
How can I best minimize my tax liability? What are the implications for state taxes? Are there any other tax requirements I should be aware of as someone new to contract work? What questions should I ask the employer to ensure I am protected?
