Hi,

I have been working at a University as a researcher in California. I paid my taxes for the university work last April, 2012. I have also started to work parttime (one day a week) as an independent contractor-technical consultant for a private company on Feb 1st 2012. From the company, they told me that I will be responsible for my taxes and they are not going to cut anything for tax purposes. They told me that I will get 1099 form close to April and I will pay my taxes using the info on that form.

However, I recently saw something on a website saying that I can only do that for the year of 2012. After 2012, I have to pay my taxes quarterly, not annually. Is that correct? If so, how does the quarterly tax payment work? Am I going to pay it on March, June, Sept. and December? Is there a form associated to that? Also I haven't gotten anything from IRS regarding my taxes for the contractor job. Is that normal?

Thanks!

The company you are contracting for will not prepare your 1099. You must do it yourself. You can go to any office product store and buy the forms. They are very simple. You should report and file your income from the contract work on a quarterly basis. If you fail to do so, there is a penalty.

The entire responsibility for keeping track of and filing and preparing the requisite forms is yours - the company you are providing the service for will not give you anything but your check. So you have to keep track of your income from them. You can deduct your expenses including mileage, supplies, equipment, etc.

This is not difficult - if you are a technical consultant, you will have no difficulties with this process.

That is NOT correct. If a company pays ANYONE payments for services rendered that exceed $600 for the year, they are [B][I]required by law [B][I]to generate Form 1099-MISC and provide copies to the person to whom they made the payments, to the IRS and to the state tax department.

For the FIRST year (2012), you need not make quarterly estimated payments. However, for the following years, such payments are required UNLESS you have extra money withheld from a job for which you are being paid under a W-2.

You can calculate your quarterly payments using Form 1040-ES and the payment vouchers that come with the form. For 2013, these vouchers are mailed in by 15 April, 15 June, 15 September 2013 and 15 January 2014.

Thank you very much Atlanta Tax Expert. That was very helpful.

For 2012, after I get my 1099-MISC, can I file my W2 (university) and 1099 (company) together for the annual 2012 tax? How often does the company required to send 1099? Every 3 months? I haven't gotten any 1099 from them since I have started working.

Should I expect State tax department to send something similar to 1040-ES for the quarterlies?

Quote:

---

Originally Posted by AtlantaTaxExpert

That is NOT correct. If a company pays ANYONE payments for services rendered that exceed $600 for the year, they are [B][I]required by law [B][I]to generate Form 1099-MISC and provide copies to the person to whom they made the payments, to the IRS and to the state tax department.

For the FIRST year (2012), you need not make quarterly estimated payments. However, for the following years, such payments are required UNLESS you have extra money withheld from a job for which you are being paid under a W-2.

You can calculate your quarterly payments using Form 1040-ES and the payment vouchers that come with the form. For 2013, these vouchers are mailed in by 15 April, 15 June, 15 September 2013 and 15 January 2014.

---

Thank you for correcting me. I was misinformed by someone I provided services to and this is very helpful to know.

The Form 1099-MISC is an annual document, issued about the same time as the W-2 is issued.

Yes, you can address the Form 1099 income on the same return as your W-2. You will need to submit Schedules C and SE.

The BEST way to deal with the estimated payments for BOTH the IRS and state is to increase your withholding on your job that is under the W-2. If you do not, then YOU must get the state-equivalent form for Form 1040-ES and submit quarterly estimated payments to the state as well.

Thanks a lot! Everything is very clear now.

Glad to help!