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Guide to Paying Taxes as an Independent Contractor

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If you work as an independent contractor, then you know filing your taxes is not as simple or straightforward as it is for most workers. You don't have an employer taking taxes out of your weekly wages, and you don't receive a W-2 form at the end of the year to use to file your taxes. Read on to learn what you need to know to meet your tax obligations as an independent contractor.

 

What Is an Independent Contractor?

 First, it's essential to be sure you qualify as an independent contractor for tax purposes. An independent contractor is a type of self-employed individual, but not all self-employed individuals qualify as independent contractors.

 To qualify as an independent contractor, those who pay you must only have the right to control and direct the result of your work for them. However, what that work is and how it is done must be fully in your control. 

 

Examples of Independent Contractors

 You may be classified as an independent contractor if you are any of the following:

  • Accountants
  • Babysitters
  • Carpenters
  • Electricians
  • Hairstylists
  • Housecleaners
  • Interpreters
  • Lawyers
  • Mechanics
  • Plumbers
  • Salespeople
  • Truckers
  • Veterinarians

 This is just a sampling of the vast and varied vocations that qualify you as an independent contractor.

 

How to File Taxes as an Independent Contractor

 As an independent contractor, you will either need to file a 1099-MISC form or provide all your receipts to report your taxable income. Quarterly Estimated Taxes are paid four times a year.  For a calendar taxpayer, they are due April 15; June 15; September 15 and the following January 15Depending on your particular circumstances, you may also need to include other forms with your return, such as a:

  • Form 1040
  • Schedule C
  • Schedule C-EZ
  • Schedule SE

 This can all seem confusing and, even, overwhelming if you're unfamiliar with all the ins and outs of tax accounting. What's more, you could wind up paying more in taxes than you need to, if you do it improperly or overlook tax advantages you have available to you. For these reasons, it may serve you well to have a professional help you with these integral duties.

 A tax accountant has the expertise and experience needed to help you navigate all the nuances and intricacies of paying taxes properly as an independent contractor, from the forms you must file and the deadlines to which you must adhere to the tax deductions and other related savings available to you. 

 For a tax accountant to help you properly meet all your tax obligations as an independent contractor in the Charlotte area, call on Scott Boyar, CPA at 704-527-2725 or online at https://www.sboyarcpa.com/.

Posted by Scott Boyar CPA

 

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