last year I filed taxes based on W2. This year I am getting income as a contractor and the employer will issue 1099 at the end of the year. where to start?

[sharmara01]

For today, I just want to estimate my taxes, pay it to stay compliant with IRS. I am assuming when I get 1099 I will be able to file my taxes at that time. Is that true? I want to use turbo tax to track all this so that it can be used to submit my taxes at the end of the year.

[VolvoGirl]

When you get paid with a 1099NEC or no form you are a self employed independent contractor.  You will file a Schedule C in your personal 1040 return.

Some general info on self employment on Schedule C.......

You will need to keep good records.  You may get a 1099NEC 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.

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 Premium or any Desktop program but the Desktop Home & Business version will have the most help.

Turbo Tax Self Employed Tax Hub
https://turbotax.intuit.com/personal-taxes/self-employment-taxes

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

[VolvoGirl]

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax on it.  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.  

PAYING ESTIMATES

You may need to send in quarterly estimated payments to cover any self employment tax and increase in income.

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).

Turbo Tax will calculate the 1040ES estimated payments

https://ttlc.intuit.com/community/tax-payments/help/can-turbotax-calculate-next-year-s-federal-estim...

How to make the Estimated payments

https://ttlc.intuit.com/community/tax-payments/help/how-do-i-make-estimated-tax-payments/00/25875

Here are the blank Estimates and instructions…..

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

[xmasbaby0]

You will not file a 2025 tax return until early in 2026, when tax year 2025 is over.   Your client(s) will issue 1099NEC's in January.    If you are getting a 1099NEC you are not an employee and do not have an employer.  You are an independent contractor who has a client.  You will be paying self-employment tax for Social Security and Medicare as well as ordinary income tax.  

If you expect to owe at least $1000 you might want to pay some estimated tax directly to the IRS this year.

https://www.irs.gov/payments

If you have self-employment income for which you will pay self-employment tax for Social Security and Medicare,  you will need to use online Premium software or any version of the desktop software download so that you can prepare a Schedule C for your business expenses.

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/turbotax-support/en-us/help-article/import-export-data-files/enter-self-empl...

If you live in a state with a state income tax, you might need to make estimated payments to your state.

https://turbotax.intuit.com/tax-tips/small-business-taxes/the-home-office-deduction/L1RZyYxzv

https://ttlc.intuit.com/turbotax-support/en-us/help-article/estimated-taxes/make-estimated-tax-payme...

https://turbotax.intuit.com/tax-tools/calculators/self-employed/

https://www.calcxml.com/calculators/self-employment-tax-calculator     (non-TT site)

https://ttlc.intuit.com/community/business-taxes/discussion/self-employed-don-t-miss-these-tax-moves...