I am new to being an independent contractor and have never filed quarterly federal taxes as such. Any tips on where to go to begin this process and itemize deductions?

[paul_demiglio]

I want to ensure my tax filing for the quarter is as accurate and complete as possible. Due to life circumstances I've been unable to research this as much as I planned. I need leads/direction on where to go and even how TurboTax could help.

[Critter-3 · Accepted solution]

If you are new to being self employed, are not incorporated or in a partnership  and  are acting as your own bookkeeper and tax preparer you need to get educated ....  

If you have net self employment income of $400 or more you have to file a schedule C in your personal 1040 return for self employment business income. You may get a 1099-Misc for some of your income but you need to report all your income.  So you need to keep your own good records. Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 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 

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

Publication 946 … Depreciation

https://www.irs.gov/pub/irs-pdf/p946.pdf

                                              

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Self Employed return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
http://quickbooks.intuit.com/self-employed

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 2017 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.
 


PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2017  SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year (or next 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.)

To prepare estimates for next year, You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
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

[Carl]

While you need to educate yourself on the self-employment aspect of taxes, here's a quick answer to your question.

First, you do not "FILE* a quarterly tax return. You *PAY* quarterly taxes. If your state taxes personal income then in addition to paying quarterly taxes to the IRS, you must also pay quarterly taxes to your state. 

Now the IRS provides all these worksheets for figuring your quarterly taxes. But having been self-employed for over 15 years now I can tell you that it's an absolute waste of time, resource, and brain power. If you elect to use the worksheets, your quarterly taxes due will come out somewhere between 19% and 23% of your *GROSS* business income. So if you just send the IRS 20% of your *GROSS* business income each quarter, then come tax filing time you'll be fine. You can pay your quarterly taxes to the IRS online at www.irs.gov/payments. *PRINT* *YOUR* *RECEIPT*!!!!!

If your state also taxes personal income, then you will need to pay your state quarterly taxes separately. How you do that, depends on the state. Not all states offer the ability to pay quarterly taxes online. So you should check the website of your state's taxing authority. When you pay your state, if you pay an amount equal to whatever rate your state taxes personal income at, then you'll be fine at tax filing time. For example, California has the highest state taxes at 13%.

[glataxhelp]

I live in Missouri, but did  work as an independent contractor in Illinois starting  on 11/17/21.  I earned $5,520.00 for tax year 2021 for this contractor position. The company I worked with did not take out any deductions (federal taxes, state taxes, etc.). My wife and I both had income in Missouri, where tax deductions were made by the employers,  but worked in Illinois as a contractor for a month and a half, where I only received a 1099-NEC, and no deductions were made by the employer. Please advise how should file taxes in this case.

[glataxhelp]

This was my first job as a contractor, and the opportunity came up in the middle of November, so I had no idea it would not be taxed or that I would need to pre-pay taxes. I have already prepared my federal and state taxes for the Missouri income, but need assistance on how to file taxes for this $5,520.00 income I made in Illinois.

[Vanessa A]

If you are an independent contractor you are not an employee, therefore, no one withholds taxes for you, you must pay them yourself quarterly.

You can use either TurboTax now and do a dummy return to figure out how much you will need to pay quarterly or you can use QuickBooks Self-Employed to figure your quarterly taxes. 

To enter your self-employment income click the following:

• Federal
• Income and Expenses
• Show More next to Self-Employment
• Start or Revisit next to Self-Employment
• Yes, to you have any self-employment income or expenses
• Enter the type of self-employment work you do
• Click through a few more screens and you will get to a screen that says "Your XX info"
• Click Looks good
• Then you will come to a screen that says Let's enter the income for your business.  It will give you the option of 1099-NEC or Other self-employed income including the 1099K , cash and checks.  Select the one that applies to you and hit continue
• If you do not select one, it will not let you enter your income
• Enter your self-employment income on the next screen

There are many deductions you can take depending on what you are doing as an independent contractor, so the best thing to do is probably just walk through the self-employment section of TurboTax and see what applies to you.