If you`re an independent contractor, you`re responsible for paying taxes on your own. This means filing the right tax forms to ensure you`re paying the correct amount of taxes owed. Here`s what tax forms you need to file as an independent contractor:
Before you start working with a client, they will likely ask you to complete a Form W-9. This form requires you to provide your name, address, and taxpayer identification number (TIN). Your TIN can be your social security number or an employer identification number (EIN) if you have one. The client uses this form to report your income to the IRS.
If you`ve earned more than $600 from a client in a year, they`re required to send you a Form 1099-MISC. This form reports your income from that client to the IRS. You`ll use this form to report your income on your tax return.
As an independent contractor, you`re required to pay estimated taxes since you don`t have taxes withheld from your paychecks. Form 1040-ES is used to calculate and pay your estimated taxes each quarter. The form includes a worksheet to help you calculate your estimated taxes based on your income and deductions.
Form 1040 is the main tax form used by taxpayers to report their income and deductions. As an independent contractor, you`ll use Form 1040 to report your income from all clients and claim any deductions you`re eligible for. You`ll also use this form to calculate your final tax liability and either pay any taxes owed or request a refund.
Schedule C is a supplemental form to Form 1040 used to report income and expenses from a business or self-employment. As an independent contractor, you`ll use Schedule C to report your income and any expenses related to your work. This form helps you calculate your net income, which is the amount you`ll pay taxes on.
In conclusion, as an independent contractor, it`s important to keep track of your income and expenses throughout the year and file the necessary tax forms on time. By doing so, you`ll ensure that you`re fulfilling your tax obligations and avoiding any penalties or fines from the IRS.