Hello, this is my first time working as an independent contractor from home so I will be filing 1099.====>Correct;as a contractor, you must fill out a Form W-9 for each person with whom you contract then they ?ll issue you a 1099 The 1099-MISC form reports the total amount of payments you receive from a single person or entity during the year you've provided services to them.
I do not know how much to set aside for taxes and cannot find anywhere how to determine this. The pay isn't steady as it varies on the type of work, but if I could get help on just approximating that would be great. I'd have to set aside federal and state (Oregon=====>you as a contractor need to file your return aslongas the amount on SCh C line 29 / 31 is $400 or exceeds $400 and also need to pay self employment tax to irs aslongas the amount on SCh SE line 2 / 3 is $400 or exceeds $400; Individuals, including sole proprietors generally have to make estimated tax payments if they expect to owe tax of $1k or more when their return is filed;however, you don?t have to pay estimated tax for the current year if you had no tax liability for the prior year; You were a U.S. citizen or resident for the whole yearlYour prior tax year covered a 12-month period. Self-employment taxes are comprised of two parts: Social Security and Medicare. You will pay 6.2 percent and your employer will pay Social Security taxes of 6.2 percent on the first $118,500 of your covered wages. You each also pay Medicare taxes of 1.45 percent on all your wages - no limit. If you are self-employed, your Social Security tax rate is 12.4 percent and your Medicare tax is 2.9 percent on those same amounts of earnings but you are able to deduct the employer portion on 1040 page 1 line 27 . yo can send me email for more info; [email protected]