Question

Contract 1099

Forum|Forum|4 years ago
October 27, 2021
1 reply
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I am beginning a contract job next month and want to know how much money to set aside each month for taxes?

Hi Jacobmx,

As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly. Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income

https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

Estimated tax is the method used to pay tax on income that is not subject to withholding (for example, earnings from self-employment, interest, dividends, rents, alimony, etc.). Use Form 1040-ES to figure and pay your estimated tax

https://www.irs.gov/forms-pubs/about-form-1040-es

Hope this helps,

Ron G

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