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Unemployed Independent Contractor + Artist

Forum|Forum|3 years ago
August 31, 2022
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I have been unemployed since July 2021, but I was able to take on independent contractor work with the Appen platform for the past 6 months. I make about $1.2k/month working as an independent contractor. My income from Appen is transferred through Payoneer and received in my PayPal account. No taxes or fees are collected from this income. I have never had to file taxes for this kind of unemployed work, so I'm not sure how to estimate the percentage of my income I should set aside to save so I am prepared to pay my dues when required. I heard that some independent contractors have to file taxes 4 times a year rather than solely before tax day, too... So my first two questions are:

How do I calculate the amount I should save from my income to actually afford to pay taxes, and how would I know if I'm included in this bunch who have to pay 4 times a year?

Lastly, I am an artist that accepts commission payments through PayPal. This is more of a side-hustle hobby to keep me afloat while I continue my job search since I only make about $100-400/month with it. Some months I earn nothing at all.

So, my last question is would I be required to report my art commission income as well-- if so how would I report it?

😳Thank you for the help

Best answer by EricE_CPA

As an independent contractor, you are self-employed and are considered by the IRS as operating a small business doing what you doing such as an Artist

You can use TurboTax Home & Business to file your tax return.

Read this article for more information on filing as a Self-employed contractor Reporting Self-Employment Business Income and Deductions

How do I calculate the amount I should save from my income to actually afford to pay taxes, and how would I know if I'm included in this bunch who have to pay 4 times a year?

See this article on How to Determine What to Pay and When Estimated taxes

Use this Estimated tax calculator calculator

So, my last question is would I be required to report my art commission income as well-- if so how would I report it?

You would report this as Other Income and not as apart of your self-employed independent contractor income.

E

EricE_CPAAnswer

As an independent contractor, you are self-employed and are considered by the IRS as operating a small business doing what you doing such as an Artist

You can use TurboTax Home & Business to file your tax return.

Read this article for more information on filing as a Self-employed contractor Reporting Self-Employment Business Income and Deductions

How do I calculate the amount I should save from my income to actually afford to pay taxes, and how would I know if I'm included in this bunch who have to pay 4 times a year?

See this article on How to Determine What to Pay and When Estimated taxes

Use this Estimated tax calculator calculator

So, my last question is would I be required to report my art commission income as well-- if so how would I report it?

You would report this as Other Income and not as apart of your self-employed independent contractor income.

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