Contractor Taxes

**BULLET_WS6** · 12-14-2009, 07:04 AM

I am an independent contractor for a company so I have to withhold my own taxes to pay at the end of the year. Well, this is my first year to pay as a contractor and I'm am wondering who else out there is in the same situation and maybe has a tip to recommend saving money on it. What I am looking for is tricks around paying some of it with claiming stuff. Any help would be appreciated and hope this would help others.

**gwballin** · 12-14-2009, 07:13 AM

Originally Posted by BULLET_WS6

I am an independent contractor for a company so I have to withhold my own taxes to pay at the end of the year. Well, this is my first year to pay as a contractor and I'm am wondering who else out there is in the same situation and maybe has a tip to recommend saving money on it. What I am looking for is tricks around paying some of it with claiming stuff. Any help would be appreciated and hope this would help others.

First off, I’ll tell you that depending on your tax liability if you are waiting to pay the entire amount when you file your tax return you are likely to be subject to interest and penalties for being underpayed throughout the year.

Also keep in mind that in addition to the income taxes you may owe, you are also subject to self employment taxes at a rate of 15.3%.

By “claiming stuff” I assume you are talking about taking deductions on your Sch. C. There are no “tricks” to it, if you have a legitimate deduction take it.

**BULLET_WS6** · 12-14-2009, 07:23 AM

Originally Posted by gwballin

First off, I’ll tell you that depending on your tax liability if you are waiting to pay the entire amount when you file your tax return you are likely to be subject to interest and penalties for being underpayed throughout the year.

Also keep in mind that in addition to the income taxes you may owe, you are also subject to self employment taxes at a rate of 15.3%.

By “claiming stuff” I assume you are talking about taking deductions on your Sch. C. There are no “tricks” to it, if you have a legitimate deduction take it.

Well I thought it was a quarterly thing, but my mom said she would help me and claimed she helped my sister do it and said I can do it at the end of the year. Hopefully that doesn't screw me.

**blackcar** · 12-14-2009, 07:24 AM

I'm an independent contractor and a regular employee. I get a 1099 and a W-2. One thing I've learned is you have to pay your taxes in quarterly. If you owe over a certian amount at the end of the year (you didn't pay enough in quarterly) you will get a fine. I pay taxes in all year for my regular job and my pay from my 1099 is so small after my deductions it has never been an issue for me. But if your only income is on the 1099 then you need to pay quarterly.

This will be my 3rd year to get a 1099. I think I'm gonna get prof. help this year. If they find a few deductions that I would have missed, it will pay for itself.

**BULLET_WS6** · 12-14-2009, 07:33 AM

Originally Posted by blackcar

I'm an independent contractor and a regular employee. I get a 1099 and a W-2. One thing I've learned is you have to pay your taxes in quarterly. If you owe over a certian amount at the end of the year (you didn't pay enough in quarterly) you will get a fine. I pay taxes in all year for my regular job and my pay from my 1099 is so small after my deductions it has never been an issue for me. But if your only income is on the 1099 then you need to pay quarterly.

This will be my 3rd year to get a 1099. I think I'm gonna get prof. help this year. If they find a few deductions that I would have missed, it will pay for itself.

Dang now I am kind of scared that I will have fines. Hopefully they will have mercy on me, but I doubt it.

**67CamaroRSSS** · 12-14-2009, 08:11 AM

Tell me what is wrong with this scenario:

The little guy gets raped if they don't pay their taxes while big time tax cheating assholes like our Treasury Secretary Tim Geithner (and various Congress persons) gets away with it.

**blackcar** · 12-14-2009, 08:19 AM

From the IRS website:
"In most cases, you must make estimated tax payments if you expect to owe at least $1,000 in tax for 2009 (after subtracting your withholding and credits)"

4th quarter payment is due by Jan 15th. Seek prof. help before Jan 15th. It may save you some money.

**BULLET_WS6** · 12-14-2009, 08:21 AM

Originally Posted by blackcar

From the IRS website:
"In most cases, you must make estimated tax payments if you expect to owe at least $1,000 in tax for 2009 (after subtracting your withholding and credits)"

4th quarter payment is due by Jan 15th. Seek prof. help before Jan 15th. It may save you some money.

sweet, thanks so much

**Bottesini** · 12-14-2009, 09:43 AM

I have had to do it since I started freelancing for a while now. The first year I was burned badly, ever since then I now keep every receipt that I can use as a write off for the business. I also keep very diligent track of the mileage. Between those two things I can almost always insure that I either loose money from the business or just barely break even. Though with what I do I can write off more than you most likely.

**blackcar** · 12-14-2009, 10:24 AM

Originally Posted by Bottesini

I have had to do it since I started freelancing for a while now. The first year I was burned badly, ever since then I now keep every receipt that I can use as a write off for the business. I also keep very diligent track of the mileage. Between those two things I can almost always insure that I either loose money from the business or just barely break even. Though with what I do I can write off more than you most likely.

Yeah, I know what you mean. My first year I had to pay in some, not much. Second year I had a negitive income, after my deductions. Still can't figure out how I paid my bills with out any income.

**Bottesini** · 12-14-2009, 03:24 PM

Originally Posted by blackcar

Yeah, I know what you mean. My first year I had to pay in some, not much. Second year I had a negitive income, after my deductions. Still can't figure out how I paid my bills with out any income.

Well with the way things are currently I get to do all sorts of write off like mileage which is about 50 cents a mile. I also can write off almost anything including CDs, DVDs, and most of my meals that I eat out. It is a bit scary to realize you ever make money, but it is just a way of playing with the numbers.

**BULLET_WS6** · 12-14-2009, 09:21 PM

Originally Posted by Bottesini

Well with the way things are currently I get to do all sorts of write off like mileage which is about 50 cents a mile. I also can write off almost anything including CDs, DVDs, and most of my meals that I eat out. It is a bit scary to realize you ever make money, but it is just a way of playing with the numbers.

I know you put in serious miles when you did that deal at Tarleton but mine is pretty heavy too. Each round trip to work is 52 miles for me.