I just got hired at an office, I had been helping organize the office and was asked to manage it full time. I am being paid as a contractor, so I have to fill out a contract at the end of the week with everything I did for them that week, then they pay me. I got my first check today and there was no taxes taken out of it, none, no city, school, federal nothing. I normaly over pay my taxes and get money back, will I have to pay at the end of the year? How will I do my taxes?

For your information, there are no taxes that are withheld from a Contractor or Consultants paycheck.

The amount of tax that you would be liable would depend upon on the extent of profit you generate from your contracting engagement. Clearly there would be some reasonable expenses that you may be able to offset against your contracting income. These expenses will offset your total income received and will result in your net taxable income.

The amount of taxes that you would owe would be a combination of the Self-Employment Taxes (S/E Taxes) which is 15.3% and your regular income tax rate which would range from 15% to 31.% depending on your tax bracket, and these would be applied against your net taxable income.

The best way to proceed would be to have a CPA prepare an estimated tax liability for the year and provide you with quarterly vouchers to enable you to make quarterly estimated tax payments, so that you would not be burdened with a large tax liability on April 15, 2010!

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.