The Ultimate Guide To Independent Contractor Taxes

For those who are self-employed or doing freelance work, the process can be even MORE confusing. Chances are, if you fit into the latter category, you'll need to file something called independent contractor taxes.

Understanding what independent contractor taxes are and how they work is crucial to avoid issues with the IRS. This post will run through exactly who needs to pay these taxes, how you can go about paying them, and also cover some tips to make it easier for you.

Ultimate Guide To Independent Contractor Taxes

Who Needs to Pay Independent Contractor Taxes When it comes to who is an independent contractor, the IRS states that “the general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.”

How Do Independent Contractor Taxes Work? As an employee, you're paid on a consistent schedule (weekly, bi-weekly, or monthly). When you work as an independent contractor, you act very much like business owners

Maybe you want to be paid at the end of the year via credit card, or maybe you want to be paid on a project-by-project basis via check. Because of this, the way that independent contractor taxes work is different from those of a regular employee.

Tax Deductions Before going on ahead and filing your taxes, consider organizing your tax deductions for the year. Tax deductions are basically business expenses that independent contractors can use to lower their net income.

So you've received your 1099 forms from employers and also compiled all your relevant tax deductions. Now it's time to finally file your taxes. When it comes to independent contractor taxes, the IRS treats you much like a self-employed individual.

How to File Your Taxes

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