I'm self-employed, aka an independant contractor. When I'm working for a company I submit my hours in the form of an invoice for my time, how detailed - depends on the company. Once an invoice is submitted they cut a check, at the end of the tax year they issue a 1099 that lists how much they've paid. That's what you'll need for your taxes, the invoices are more for your own records.
Estimated taxes you won't have to worry about unless you intend on staying independent for more than 1 tax term. Basically you take the income you made in the previous year working for yourself and use that to figure out how much you'll owe in tax and submit quarterly payments.
Now the fun part, be very careful about what you're doing there. If the IRS thinks you're a fulltime employee instead of a contractor you and your employer may not be happy campers. There are guidelines on the IRS site for how to determine if you're independent or not, found here: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
In terms of taxes, as an independent contractor, for federal taxes you'll have to pay the SE (self-employment) Tax and are looking at 15.3% so make sure you stash away at least that much of what you earn.
Hope that helps
- DW |
