I work a full time job and am looking into doing some free-lance work on the side in graphic design.

I am wondering how that will work out with taxes? I've tried my hand at research and now I am confused? :confused:

I have to pay quarterly taxes? Is there any known software out there that will figure how much I need to be saving to pay these taxes? And how does this work out with my having a full time job with a company?

I'm trying to figure out if it will be worth all the extra leg work.

You need to file Form 1040 and report the freelance income on Schedule C.

Any standard tax software will let you produce the quarterly tax form. You can avoid this by increasing the amount of tax being withheld from your full-time job.

To add to what ATE said. You can use the Schedule C to report expenses related to your free lance work. This can then reduce the taxable amount.

Good point, Scott.

I normally mention such things, but sleep deprivation clouds the mind! :-)

How would you suggest I keep log of what I make and how much I will need to pay quarterly? Just using one of the tax programs?

You should use some sort of invoicing program to track your freelance payments. Even if you only use a spreadsheet.

Thanks for your quick replies. I think I'm just overwelmed! Is there a good resource to know how much I will have to pay in taxes?

Your NET free lance income is added to your other income to compute your tax liability. You need to estimate your taxes based on that.

If the Form 1099-MISC is you ONLY source of income, pay about one-third towards quarterly payments.