All of the income that you receive from this company will be subject to tax, and must be reported on your tax return. The company paying you should send you a 1099 form at the end of the year to show the total amount you were paid. If they do not provide you with such a form, then you will have to rely on your own records to figure your income for the year that needs to be reported.
Since you are being paid as an independent contractor, you are considered to be self employed. As a self employed person you will report your income on Schedule C. On that same schedule you will also be allowed to deduct any ordinary and necessary expenses that you had in connection with your job. This might include such things as a mileage allowance for use of your personal vehicle, cost of supplies, tools, etc. Once you deduct your expenses from your gross income, you will be liable for tax on the net amount.
As an independent contractor, you will not only be liable for federal and state income taxes
, but you will also owe the full share of social security and medicare
If you feel that your employer has wrongly mis-classified you as an independent contractor rather than an employee, you may file
Form SS-8 with the IRS to explain your job, and they will make a determination on how you should be classified. This determination would be binding on all parties.
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