I will work for a company two days per week as independent contractor, how do I pay following taxes and how often should I do that? Does Turbo Tax provide related features? I used to file tax jointly with my wife by using W-2 forms, how to report my wage information in Turbo Tax since I won't have W-2 form anymore (my wife still does)? Will following taxes be all that I need to care about?
3.Federal income tax
You will use TurboTax Self Employed online or Home and Business on a desktop, Your income will be reported on Schedule C and your social security on Schedule SE. You will file those schedules in addition to your personal 1040 return. You pay your taxes to federal and state by sending one quarter of the total amount anticipated to be owed in four quarterly installments. You make those payments to the IRS and to the state if needed.
As a person new to self-employment, I would highly recommend that you use Intuit Quickbooks. It does most of the calculations and work for you and lets you know if you are on track with prepaying your taxes. TurboTax does have an interview where it helps in calculating your payments and it can create printable vouchers to mail with your quarterly checks.
I personally would recommend that at least for the first year, you take your Quickbooks records to a preparer like HR Block or you use the TurboTax service where a tax expert does your return for you. You could possibly now have home office expenses, vehicle expenses, utility, maintenance, equipment, supplies, insurances, depreciation, or other expenses. A tax expert can point out what to look for and make sure you get every tax break you are entitled to receive.
Keeping great records is the foundation of being successful with filing accurate taxes for an independent contractor. Quickbooks for Self Employed will connect to your bank and financial institutions and find the transactions that will affect your business records. It will create the correct records and reports for you. There are videos to help you learn. It is currently $15 a month with first three months at $10.50. You can quit anytime if it is not right for you.
When I was self employed, I used a package that included QuickBooks and TurboTax Self Employed. The two programs work together to make doing taxes quicker and easier. It saved me a lot of time and work.
You will have self-employment income so next time you file a tax return, you will use Self-Employed software (or any version of desktop software) so that you can prepare a schedule C for your self-employment income. You can still file a joint return, and enter ALL of the income from your spouse's W-2, etc. and enter your own self-employment income on the same tax return.
Since no tax or SS, etc. will be withheld from your self-employment income you will pay self-employment tax for Social Security and Medicare, as well as ordinary federal, state and local income tax.
You will put your business expenses on a Schedule C.
You *might* need to pay quarterly estimated tax --- or your spouse could increase the amount of tax being withheld from her paychecks.