Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It only takes a minute to sign up.
Sign up to join this community
I worked as an independent contractor for a short time this year (summer), bringing in under 5K in earnings. I have received all of my W2's at this point and am preparing to do my taxes this weekend. Will I need to fill out any forms other than my standard tax form? I'm guessing I will need for the Medicare/FICA tax that should have been collected on the small amount earned this summer - is this the correct form?
Are there any other gotchas I should look out for?
You would put your earnings (and expenses, don't forget) on Schedule C, and then do a Schedule SE for self-employment tax.
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html
1040ES isn't used to compute taxes, it's used to pay taxes. Generally you are supposed to pay taxes as you go, rather than when you file. There are exceptions where you won't be penalized for paying when you file, "most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller" from http://www.irs.gov/taxtopics/tc306.html i.e. there's a safe harbor as long as you pay as much as you owed the year before. If you owe a lot at the end of the year a second time in a row, then you get penalized.
Havoc P's answer is good (+1).
Also don't forget the other aspects of business income: state filing fees, county/city filing fees, business licenses, etc. Are there any taxes you have to collect from your customers?
If you expect to make more this year, then you should make estimated quarterly tax payments. The first one for 2011 is due around the same time as your federal income tax filing.
