Solved

Contract work

Forum|Forum|4 years ago
October 27, 2021
1 reply
0 views

My husband is about to start a contract work position for a trucking company. He also works full time for a company as a W-2 employee. What do we need to do for tax purposes?

He should keep his receipts and keep track of his mileage for tax purposes correct? The truck he will be driving belongs to the company he'll be contracting for so maybe he doesn't need to keep track of his mileage.

What about the income? We talked about manually deducting from his checks into a savings account so we can pay taxes on the income when we file. Is that what we should do?

Is there anything else we need to do?

Best answer by JandKit

Hi kashleydb,

You will need to keep records and receipts of all expenses. If the company provides the vehicle, I assume that your husband has no expenses associated with it. If there are any expenses that are associated with the vehicle than he should definitely keep an accounting of them. The self-employed income will probably generate a 1099-NEC which will reflect the amount paid for the year. Any expenses incurred such as unloaders, CB radio, small tools, gloves etc should be recorded. My suggestion would be to create a checking account that is solely set aside for the business. That way there is no doubt about the business use. All Estimated payments can be taken from the account with this documentation.

Finally estimate the earnings for the year as best you can so that you have a good idea what the estimated payments should be. Here is a link that will help you to calculate the estimate income.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

J

JandKitAnswer

Hi kashleydb,

You will need to keep records and receipts of all expenses. If the company provides the vehicle, I assume that your husband has no expenses associated with it. If there are any expenses that are associated with the vehicle than he should definitely keep an accounting of them. The self-employed income will probably generate a 1099-NEC which will reflect the amount paid for the year. Any expenses incurred such as unloaders, CB radio, small tools, gloves etc should be recorded. My suggestion would be to create a checking account that is solely set aside for the business. That way there is no doubt about the business use. All Estimated payments can be taken from the account with this documentation.

Finally estimate the earnings for the year as best you can so that you have a good idea what the estimated payments should be. Here is a link that will help you to calculate the estimate income.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

K

kashleydbAuthor

Thank you! That is great information! To clarify, the 1099-NEC will let us know how much we owe in taxes when it's time to file? Then we record any deductions from there and pay the taxes out of pocket (from the business checking account we open) if applicable. Correct?

J

JandKit

The 1099-NEC will only tell you how much income your husband was actually paid. Once you have included all of your expenses , you will then know if there is an additional amount to be paid. To be sure, You can use the link provided to show how much tax will be due(be proactive) before hand. This will allow you to make estimated tax payments early to offset any chance of an estimated tax penalty. Included here for reference:

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"