Hi,

I need serious help!! I am a first time user and this is a three parter, so please be patient w/ me :-)

First, I was hired mid-June 2007 as a consultant and am paid on a 1099.
How often am I supposed to file taxes and how much can I estimate my payment to be so I can put it aside each check?

Second, If quarterly, how and when do I write my mortgage interest and property taxes off?

Finally, My previous employer owes me 3 months salary before the company shut their doors (paid via W-2 there); I filed a claim w/ the DOL but haven't heard anything yet. Can I write that amount off?

Thanks!!
:eek: :confused:

Last part first: You cannot deduct income not received. Sorry!

You CAN make quarterly estimated payments for 2007, but you are in a "safe harbor" as this is your first year as an independent contractor, and the last payment is due on 15 January 2008. Better just to wait and file your taxes by 31 January 2008.

Now, you will need to file Form 1040 with a Schedule C and Schedule SE to claim the 1099 income, You will also be able to claim a myriad of deductions not generally available to W-2 employees.

The SE (for self-employment taxes) rate is 15.3% for every dollar earned under $97,400.

Your federal income tax rate is probably 15%.

So you need to put about one-third of each check into a separate bank account so you will have it to pay your taxes early next year.

If you need professional help with this, contact me at [email protected].