Filing taxes as an independent contractor: A step-by-step guide

Contributing sentiments towards policy:

54% : Companies that misclassify a worker as an independent contractor instead of an employee could be on the hook for paying self-employment taxes on the worker's behalf.
54% : Self-employment taxes are similar to FICA taxes you pay toward Social Security and Medicare when you have a traditional job.
54% : Tax filing gets a bit more complex for self-employed people like independent contractors and sole proprietors.
54% : However, as a 1099 worker, you'll often qualify for tax deductions you wouldn't be able to claim as a regular W-2 employee.
53% : You're also responsible for self-employment taxes, which pay for both the employee and employer's share of Social Security and Medicare taxes, on top of federal income taxes and any applicable state and local taxes.
53% : In addition to regular income taxes, you'd be on the hook for self-employment taxes.
52% : If you're an independent contractor, you're required to file a tax return and pay self-employment taxes if you have net earnings of more than $400 in one tax year.
50% : Independent contractors need to make quarterly estimated tax payments if they expect a tax bill of at least $1,000 for the year.
49% : If you expect your tax liability to exceed $1,000 for the year, the Internal Revenue Service (IRS) expects you to make quarterly estimated tax payments.
49% : Read more: Here are 7 free tax filing optionsIndependent contractors are generally required to withhold taxes from their earnings to pay self-employment tax and federal income tax, as well as state income taxes and local taxes, if applicable.
49% : The overall tax rate for independent contractors will vary based on their tax bracket.
47% : Most independent contractors pay a 15.3% self-employment tax in addition to federal income tax, as well as state and local taxes, depending on where they reside.
46% : Additionally, if you earned more than $600 from any individual client or business, they must complete Form 1099-NEC, which is used to report non-employee compensation.
41% : These are the general steps you'll need to follow:You may be able to file your return on your own using tax preparation software if your situation is relatively straightforward.

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