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QUOTE,"i HAVE JUST BECOME AN INDEPENDENT CONTRACTOR"---You , as a self-employed independent contractor, should pay a significant percentage of your income to the government in the form of SECA tax. YOur SECA tax is made up of your "contributions" to both the Social Security, OASDI, I mean, and Medicare programs, Hi, health insurance. However, the basic tax rate for the self-employed under SECA is 15.30 percent - twice the 7.65 percent rate(6.2% +1.45%) that regular employees must pay on their paychecks as FICA tax.To pay SECA taxes, file Form 1040, Schedule SE, Self-Employment Tax.
As you know, since no one else is withholding tax payments from your income, you have to make quarterly estimated tax payments( due by 15 th of Apr, June, Sep, and Jan.) by filing Form 1040-ES, Estimated Tax for Individuals, to help you determine the amount of your quareterly payments. REMEMBER: As a self-employed, you have expenses and must keep track of all of this to make quarterly estimated tax payments so that at the end of the year you do not owe a penalty for not having paid a sufficient amount throughout the year. For further info, plase visit the web site: Estimated Taxes |
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