So I"m a contract worker currently, each week I get a check cut by the place I'm doing database work at, without any taxes taken out.....I was telling my dad this and he says I"m going to get fvcked for taxes because usually the employer pays half your social security and medicare, taxes, and all that jazz...but since I get a check without any taxes taken out, at the end of the year I'm going to have to pay 100% of those things isntead of just 50%...true or not?
Do independent contractors get F'd in the A on taxes??
- Thread starter Accipiter22
- Start date
Depending on what you filled out at the beginning of the year. I believe u should have left that $0.00 on the W2 or whatever that was and u should be taxed anyways before u get your check.
you don't get screwed.... you pay the same as everyone else... just all in one lump sum and at the end of the tax year. I'd actually prefer to be in your situation than to have forced deductions....
my dad is self-employed, he has to pay quaterly (although file only yearly), isn't this the same?
Yeah, I think you only pay your share at the end of the year. I'd prefer this, instead of having the gov't earn money with my money.
dullard
Elite Member
- May 21, 2001
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Yes as an independent contractor you have to pay the employers share of the taxes.
But, in return you get to deduct many, many things on your taxes. Be certain to use a room or two in your house/apartment to do work related things. Suddenly your mortgage/apartment rent and many utilities are partially deductable. Etc. You can often follow the law perfectly and be better off if you keep good records.
But, in return you get to deduct many, many things on your taxes. Be certain to use a room or two in your house/apartment to do work related things. Suddenly your mortgage/apartment rent and many utilities are partially deductable. Etc. You can often follow the law perfectly and be better off if you keep good records.
kranky
Elite Member
- Oct 9, 1999
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Employees pay half of their Social Security and Medicare taxes (7.65% of wages) and the employer pays the other half. Contractors have to pay it all themselves, so you'll be paying 15.3%. You get to deduct half of it as a business expense. Those are the only things affected.
You need to check to see if you should be paying quarterly taxes. You don't want a big penalty at the end of the year.
You need to check to see if you should be paying quarterly taxes. You don't want a big penalty at the end of the year.
Spineshank
Diamond Member
- Jun 8, 2001
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I was a contractor for a few months. You dont have to pay quarterly but its recommends so at the end of the year you arent paying in a few thousand.
Originally posted by: Phoenix86
I though you can deduct expenses as a 1099 contractor, right?
LLC has an extra $800/ year in taxes. You can still deduct expenses as a 1099.
To directly answer your Q, yes you pay extra taxes, i.e. Self Employement tax, which is the employer's share of FICA, medicare, etc. I think you'll be paying an extra 8% in taxes.
While it's not being "screwed," you will likely get a nasty bill at the end of the year that you need to be prepared for. You should be setting aside 40% of that check, you will need it.
And as kranky said beware of penalties, if this is long term you need to be making payments throughout the year.
Viper GTS
And as kranky said beware of penalties, if this is long term you need to be making payments throughout the year.
Viper GTS
You need to seek the advice of a CPA. Seriously. Many things said already are true, but a CPA will be able to help you alot more.
- Oct 30, 2000
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Dig up the Tax thread from the beginning of the year.
Many good examples and advice was presented for independents on what can be expensed, how to and what pitfalls to avoid.
Yep, this is correct. I always preferred being an independent contractor because your whole life is a write off. Well, not really but you can be creative.
- Oct 30, 2000
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Unless you are unable to find any expenses - the answer is yes. You are paying out of your pocket an extra ~8% in taxes if you receive/declare more than $600 in income.
However, most people than plan to be in this ituation realize that the benifits can easily accomidate the extra overhead.
As an employee, insurance costs are not deductible unless you get a extra-high expense.
As an independent, your medical insurance costs are expensed against the income directly.
Same goes with vehicle costs, etc.
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