I just took 2nd job--as independent contractor. I don't want to end up having to pay at end of tax year (2006) so can someone tell me what I need to do to pay taxes throughout year out of each check I receive so I don't end up having to pay at the end of the year next year?? I'd rather do it on my own, without hiring an accountant. I know I could just set up a separate savings account and take out 20% or so of each check, but I'd rather actually send the money in quarterly or something, if that is even possible... as if it were coming out of my check... any suggestions?:

Candice:

If you do it yourself, you need to complete Form 1040-ES to determine your tax liability, then mail the quarterly estimated taxes NLT than the 15th of April, June and September 2006 and January 2007. You also should send in a quarterly estimated tax payment to your state (assuming you live in a state with an income tax).

You can download the Form 1040-ES from the IRS website (www.irs.gov).

And not to forget the social security tax that would be payable as an independent contractor on money earned.

This is just a ball park figure, but we normally tell our independent contractors to put back 33 percent of their earnings to cover all the taxes that can be due. Most have some left out of it, but a lot will depend on your tax status and state you live in.