topic Just Started Working for Shipt what taxes do i need to withhold (Virginia) in Self employed

Just Started Working for Shipt what taxes do i need to withhold (Virginia)

tnoonz — Tue, 05 Nov 2019 17:23:21 GMT

Hi everyone! I just started working with Shipt as an independent contractor and I cant really find information on what taxes I need to withhold. I do know to save between 25% - 30% for Federal and Self employment tax. But do I do I pay quarterly or just when I receive the 1099? Then state tax. How does this work? I live in Virginia and I am having trouble finding information on how much I save, how I pay, how to report it and how often. Any help will will help. Thank you!

Re: Just Started Working for Shipt what taxes do i need to withhold (Virginia)

VolvoGirl — Tue, 05 Nov 2019 17:28:16 GMT

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).

Here are the blank Estimates and instructions…..

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

The 1040ES quarterly estimates are due April 15, 2019, June 17, Sept 16 and Jan 15, 2020. Your state will also have their own estimate forms.

Or you can pay directly on the IRS website https://www.irs.gov/payments

Be sure to pick the right kind of payment and year.....2019 Estimate

Re: Just Started Working for Shipt what taxes do i need to withhold (Virginia)

VolvoGirl — Tue, 05 Nov 2019 17:29:04 GMT

Some general info on self employment...........

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 track 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....

http://quickbooks.intuit.com/self-employed

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

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.

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 Schedule 1 line 27. The SE tax is already included in your tax due or reduced your refund. It is on the Schedule 4 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