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stankoga
New Member

I am employed full time, but also am an independent contractor. How do I file taxes as an independent contractor

I work full time as a firefighter. I recently began working as an uber driver and wish to file my estimated taxes quarterly. What is the best way to do this? I will not be itemizing expenses/deductions..I will be taking the .57 cent mileage credit. 

5 Replies
VolvoGirl
Level 15

I am employed full time, but also am an independent contractor. How do I file taxes as an independent contractor

Tax Tips for Uber, Lyft, Sidecar and other Car Sharing Drivers FAQ
 https://turbotax.intuit.com/tax-tools/tax-tips/Self-Employment-Taxes/Tax-Tips-for-Uber--Lyft--Sideca...

Here is some 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

Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for 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 line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

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
Hal_Al
Level 15

I am employed full time, but also am an independent contractor. How do I file taxes as an independent contractor

As an independent contractor, you file schedule C as part of your regular tax return (form 1040). Both your income and business expenses (including mileage) go on schedule C and the net profit goes to line 12 of form 1040. Business expenses are not itemized deductions on schedule A. You will also have to pay self employment (social security and Medicare) tax. SET goes on schedule SE and then to line 57 of form 1040.

You should pay in quarterly estimated taxes if you don't have enough withholding taken out to cover the tax on all your income. You might be able to increase your W2 withholding, at your regular job, to account for the extra income.
You should make 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.)


TurboTax (TT) can prepare the payment vouchers. In your 2016 software, enter at:

Federal Taxes or Personal (H&B version)

Other Tax Situations

Other Tax Forms

Form W-4 and Estimated Taxes - Click the Start or Update button

 

If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”

Or you can obtain  blank IRS 1040ES estimated tax vouches for 2017 at
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

stankoga
New Member

I am employed full time, but also am an independent contractor. How do I file taxes as an independent contractor

Thank you for your quick response Hal-Al! Im sorry but I think I need further clarification on a few matters:
1) when you say "As an independent contractor, you file schedule C as part of your regular tax return (form 1040)." Does that mean that come regular tax time I need to include whatever income I earned as a n independent contractor on my 'normal' tax form, come tax time?
 also..
2) "You should pay in quarterly estimated taxes if you don't have enough withholding taken out to cover the tax on all your income."--does "all my income" mean both my firefighting job and my uber job? I am currently claiming 0 for my fire job. Also..the quarterly estimates are only for my uber, right?

3) When you say :"You should make 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.)".... does this apply to my total combined income (both fire and uber) ? or just my uber?

4) does "If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven” mean 100% of my prior year's liability for my fire job...or my uber? I was not driving uber last year.

I am sorry for the questions...I am obviously not very good at all this, but I am looking to take care of it properly so as not to cure the wrath of the IRS. Mahalo!
Hal_Al
Level 15

I am employed full time, but also am an independent contractor. How do I file taxes as an independent contractor

Question:  Does that mean that come regular tax time I need to include whatever income I earned as an independent contractor on my 'normal' tax form, come tax time.
A: Yes.

No piece of income is taxed in isolation. You file one tax return, reporting all your income . As such, the answers to your other questions apply to your total combined income (both fire and uber).
Since this will be your first year with Uber income, estimated payments are essentially optional; since your regular withholding should  meet the 100% rule
stankoga
New Member

I am employed full time, but also am an independent contractor. How do I file taxes as an independent contractor

Mahalo!
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