I am a new contractor and I have no idea how I will have to pay my taxes and social security.Can someone help?

Question

All I know is that you have to pay taxes on a quarterly basis. I am quite lost. And do I handle social security and such seperately from income tax?

Answer 1

You can go to local tax advisor like H & R Block. It's wise to hire a professional because it will save you money in the end.

Answer 2

Well, it's not exactly _separate_ from income tax.  When you file your 1040 tax return, you'll need to file a Schedule C (business income), which maps to Schedule SE (self-employment tax).

Now, you'll need to file estimated taxes on form 1040-ES.  You may following the instructions for calculating the amount to pay, or use any method that provides a reasonable estimate.  If you underpay, the only penalty is interest (compounded daily) at a rate of about 5% annual interest, so you may not need to worry that much about miscalculating.

Answer 3

contact the social security office or the irs and they will be glad to send you info on the matter.

Answer 4

Try going to your local SBA (Small Business Administration) they will give you information and point you in the right direction.