school me on paying taxes as an independant contractor

RenegadeT

RenegadeT

no shirt,no shoes,no dice
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Wife landed some work as a consultant doing corporate project management training and will be getting paid as an independent contractor. She had to give her SSN and sign some paperwork regarding taxes as a contractor. We've always worked for the man, had more than our share withheld, and e-filed for refunds annually. I think now she'll have to pay something quarterly, but have no idea where to start. Any help would be appreciated, both federal and state of NC...thanks.
 
Hire a good tax person and keep every receipt. I mean every receipt! That's about all I know. Several of my friends are in the same boat tax wise and the accountant makes or breaks it.
 
If its just a one time thing or part time, you will probably won't owe anything due to your other withholdings. If it is full time, set back 30% and get a good accountant. Use that money to pay the bill and what's left can buy beer.
 
x10, hire an accountant (not a bookkeeper) ...you pay for a CPA, but they'll pay off in the long run. Won't take them much time to give you the run-down.

In addition to receipts, keep a mileage log for her car, record all business miles. That adds up $$$.
 
Tony i have a good cpa in greensboro i have used for 15 years if you need her.
 
They'll send her a 1099 at the end of the year.
Likely a 1099-MISC

If you do your own taxes on turbo or whatever there is a tab to simply, enter the amount in there. PRetty simple
 
As I understand it, when you work for a Company, the Company, is paying 1/2 your SS, Medicaid, & perhaps, all of workman's comp. Bottom line is, if you pay your own SS & Medicaid, it will be double, of what is shown on your current with holdings. Plus you still owe tax to State & Federal,on any profit. The cost is what keeps so many, from working for themselves. {my opinion}
 
Not if you 1099 and don't have any employees.
 
If you are an independent, you'll have to pay your "employee" AND "employer" share of SSN, Medicaid, and the WC. But, you only pay federal and state WC on the first $7,000 of income, so after that its a little cheaper.

SS for the employee is 6.2% and 6.2% for the employer. Medical is 1.45% for employee as well as the employer. FUTA is 6% paid by the employer and I can't remember the rate on the state, maybe 4.2%? As an independent, you'll be responsible for all of these, not just the employee or employer ones.
 
so will she (we, i.e. me) have to file something quarterly (fed and or NC), or can I wait til April 15th (or earlier if it ends up a refund)? FWIW, the amount will be well under $7k this year.
No offense to any CPA's out there, but at this point we think we should be able to DIY, just need a little direction.
 
Will she be paid one lump or monthly?

I've 1099'd the last 5 years usually ~30k...actually my wife has to avoid any COI....and while it can hurt to write that check...I've done it through turbo tax with no issues.

Two years ago I paid a CPA 500 to do my taxes, he was higher (by several grand)than turbo tax, so I paid their extra $100 guarantee audit defense and never looked back.
 
There is some penalty for not filing quarterly, but it's like 60 bucks it isn't worth the ppwk.
 
Of course...I'm no CPA. I wouldn't trust a power system designed by an accountant, so caveat emptor regarding my advice
 
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