1. Do I pay annual taxes since it’s a DBA /sole proprietorship? Rather than quarterly taxes?
No. Taxes are due quarterly. But understand how this works. You do not "have" to pay your federal taxes quarterly. But here's the risk. If at tax filing time if what you owe the IRS exceeds $1000 or 10% of your total tax liability (whichever is higher) then you will be assessed an underpayment penalty on top of the taxes you'll have to pay.
2. Getting a little bit of conflicting numbers, even after completing the ITA on the IRS website. I do not have to file taxes if the income from the graphics are below $499?
You are not understanding the rules.
- If your reportable income from all sources (including self-employment income) exceeds $12,300 (double that if filing joint.) then you are required to file a tax return. Period. End of story.
- If your self-employment income alone exceeds $400 then you are required to file a tax return. Period. End of story.
In both cases above, you still report all income from all sources.
2. What documents During filing will I need since I’ll be an hourly employee as well as the Graphic design DBA? Obviously the graphic work won’t be a steady regular income. I read that I will need to just attach schedule C 1040 to my personal taxes. Please guide me on this.
Either the CD version of Home & Business or the online version of Self-Employed. Other than one being on CD and the other on line, the only other difference between the two is the spelling. I find the CD version to be *significantly* more user friendly.
and 1099-misc forms and/or record of cash/check payments for your business to complete Sch C.
That's a bit misleading. When you are self-employed the IRS expects you to keep your own records of all business income and expenses, and to use those records for completing the SCH C on your tax return. Those who pay your business for your graphics design services may or may not be required to send you a 1099-MISC. But just because you don't receive a 1099-MISC does not negate your requirement to still report the income. Hence, you keep your own business records.
For your first time dealing with SCH C, I *HIGHLY* *HIGHLY* recommend you use the CD version that you physically install on your computer. It is significantly more user friendly and much easier to navigate and deal with the many, many mistakes you *will* make your first time dealing with this SCH C stuff. It's not like you learn this through osmosis ya know. 🙂 If you use the online version for your first time dealing with this SCH C stuff, the frustration of having to go around your elbow to get to your thumb every time you find and need to fix an error *will* drive you up the wall.
