“ How do I pay the government the taxes I've been withholding on my own (for only these three months)? “---->As part of your work as an independent contractor during the operation of your own business, three months in this case, your ER is required to provide completed 1099-MISC forms to you;( if your ER made more than $600 to you in payments over the course of the 2009 tax year). As a Self-employed individual who worked only part of the year to supplement your income from regular employment during the balance of the year must have your self-employment income averaged over the period of time it is intended to cover rather than a 12-month period. You were an I.C. during the the last three months and work as an EE of a firm for regular wages the rest of the year. Then your self-employment income is averaged over the three months because it is intended to meet your needs for only part of the year.There's no one year grace period on paying taxes. And you should make quarterly estimated tax payments since you've been working as an I.C. for the last three months. You file any and all your self employment income on Sch C, if that income less expenses, results in a net of $400 or more you also file a SCh SE and calculate your self employment tax as long as the amount on Sch SE line 4 is $400 or exceeds $400; however, since you are filing as a self-employed individual,an I.C. I mean, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. You do not 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 year;your prior tax year covered a 12 month period. Also Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. The 2010 Tax Relief Act reduced the self-employment tax by 2% for self-employment income earned in calendar year 2011. The self-employment tax rate for self-employment income that you earned in calendar year 2011 is 13.3% (10.4% for Social Security and 2.9% for Medicare). For self-employment income earned in 2010, the self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).
“Do I need to pay now, or do I deal with this when I file for 2011 in 2012?”---->You need to pay both quarterly estimated tax and self employment tax on 1040-ES; you should make your payments at least every three months. Estimated tax/ SE tax payments are due by April 15th for SE income that you earned from Jan 1 –Mar 31, June 15th( for Apr 1 –June 30), September 15th, and January 15th.However, as you worked ,as an I.C. , ONLY for three months, you need to pay only one quarterly estimated/ SE tax payments to the IRS; you also need to pay quarterly estimated tax to your state as long as your state imposes income tax on its residents.For your state quarterly estimated tax, you need to visit Dept of Revenue of your state.
“ What forms do I need?”---->You need to pay your quarterly estimated SE tax and quarterly estimated tax on your SE income as an I.C. on IRS Form 1040 ES.As long as the amount on 1040 Sch C line 31 exceeds $400, then you need to file Sch C and the amount on Sch SE line 4 is $400 or exceeds $400 then you need to pay your quarterly SE tax as said above and deduct 50% of your SE tax on From 1040 line27 and report your SE tax on 1040 line 56.
Please visit the IRS Website here:
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
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