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
