I just got a freelance editing job, and am told I'll have to fill out a 1099. I've been trying to read up on self-employment tax, but can't seem to get a straight answer. Do I have to send money into the government throughout the year, or can I just save 15% of it and then send it in April when I do the rest of my taxes and it looks like I owe something? Thanks!
United States - 4 Answers
Random Answers, Critics, Comments, Opinions :
1 :
Since it's your first year, you'll just pay it at the end of the year. Don't forget, you'll be able to take a lot of deductions as a self-employed worker. And depending on your income, next year you may be required to pay quarterly. I highly recommend you use a tax preparer, especially for your first return; there are lots of pitfalls that can occur.
2 :
Pay quarterly income taxes or you’ll be hit with a penalty when you file next year. http://www.irs.gov/faqs/faq-kw146.html
3 :
First off, the payer fills out the 1099. You need to send in 15.3% of your net earnings and whatever your estimated income tax on those earnings are every quarter the dates are 4/15, 7/15, 10/15, 1/15. Enclose a check with a completed IRS Form 1040ES. If you have any expenses that apply, you may deduct those from the payments you've received.
4 :
The IRS uses a pay-as-you-go system. The requirement to file quarterly estimated taxes has 3 safe harbors. As in, if you meet any one of them, you can wait until 4/15 to pay. #1. Your increased tax bill is less than $1000. #2. You pay in at least as much money via withholding as you owed on your tax return LAST year. #3. You pay in at least as much money via withhold to cover 90% of THIS year's tax bill. If the 1099-misc income is modest and from a part time assignment, then you are probably fine since you could fit within $1000. If you have a wage job, you can increase your withholding to cover the extra tax bill and skip the quarterly forms. You can even just bump your withholding for Nov and Dec and the IRS will never know that you did it late in the year. If your income is increasing from year to year, just look at last year's tax return for the total tax and adjust your W-4 to withhold up to that
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