Question for people who do work on a contract basis

[mugs]

I know when you do contract work, they don't take any taxes directly out of your check. For federal and state income taxes, I'd just report the income on my tax return, but how do I pay the other taxes like FICA, unemployment/disability (state I will be working in is PA, state I live in is NJ), etc? And I know with FICA the employer pays tax on their W2 employees in addition to what the employees pay themselves - am I responsible for the employer's half as well?

Is there anything I should consider when negotiating my pay rate other than that I will not be receiving any benefits?

Thanks.

 

[Jeraden]

Well if you do contract work regularly, you are supposed to file quarterly tax returns instead of just 1 at the end of the year. You do have to pay both the employee and employer portions of social security, although you get to write off 1/2 of the amount from your federal return at the end of the year. I'm from PA and was an independent contractor for a year and a half, so I had to go through it once. We pay unemployment tax here, but I never paid any while I was contracting - not sure if I was supposed to or not.

 

[mugs]

How do you submit your social security tax? What form do I have to fill out?

 

[woowoo]

1040se
www.irs.gov
After that report your gross to the state.

Watch out for local "contractor" taxes.