I have a side gig as a private contractor. Currently just have those funds going into a separate account since taxes aren't being withheld. What is the best approach that would allow me to use my funds and set aside the appropriate amount that I have to pay taxes on.
Hi Jld473, thanks for the question.
If you have a regular W-2 job with this side gig, please fill out the re-designed
Form W-4 Employee’s Withholding Certificate
https://www.irs.gov/pub/irs-pdf/fw4.pdf
Generally, you will owe both income and self-employment taxes on any self-employment income you receive separate from the wages you receive as an employee. If you want to pay these taxes through withholding from your wages, use the estimator at www.irs.gov/W4App to figure the amount to have withheld on Step 4 (c) Extra withholding.
Please note that the self-employment income is net of Gross revenue less business expenses. Aside from income tax, the self-employment tax is approx. 14.13% of your net income.
If you do not wish to pay via regular job W4 withholding, you can always pay estimated tax payments on your own by
Hope this helps.