K M W
Employee Tax Expert

Business & farm

Congrats on becoming an independent contractor - with that comes tax rules that are very different than what you would have experienced as a W2 employee!

 

Since you started your business June 24, you would be subject to paying estimated taxes which will be due September 15 (for income earned June 1 - August 31) and January 15 of next year (for income earned September 1 - December 31).

 

You will want to look at making both IRS estimated tax payments as well as state tax payments. For the Federal tax return, your tax return will calculate your total tax - i.e. income tax and self-employment taxes, so you will be making quarterly estimated tax payments based on those taxes combined.  

 

Calculating the amount you need to pay quarterly can be tricky - as you will have to estimate your self-employment income and expenses, combined with any other income, deductions, or credits you may have, to determine the proper amount to pay in each quarter.  TurboTax has a Self-Employment Tax Hub with tons of resources, tax tips, tools, etc., including Self-Employment Tax Calculators. You can find our Self-Employed Tax Hub at this link:  TurboTax Self Employed Tax Hub  The IRS also has specific instructions on how to figure your estimated tax in IRS Publication 505 starting on page 21, located here:  IRS Publication 505 

 

For the Federal estimated tax payments, you may send estimated tax payments with Form 1040-ES by mail, or you can pay online, by phone or from your mobile device using the IRS2Go app. You can also make your estimated tax payments through an online account with the IRS, where you can see your payment history and other tax records.  You can make California estimated tax payments either via mail or directly online - here is a link to the webpage to do so:  Make a California Payment 

 

As to any other taxes you may owe outside of income taxes, you should seek local professional advice for that, as those taxes (items such as employment tax, excise tax, sales tax, etc) fall outside the scope of income taxes and the TurboTax product. California alone has over 30 special tax and fee programs, outside of income taxes, that encompass a broad range of activities and transactions.

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