Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hi and welcome to Just Answer! 1) Do I have to state that I worked when I Actually WORK or when I receive the payment?Yes - you need to report your employment and self-employment activity to the Department of Labor. 2) Do I have to pay quarterly taxes (since i just started contracting in the 4th quarter of the year)? The company is deducting my taxes at source that I contract for. You generally need to pay estimated taxes if you will owe more than $1000 at the tax time. I suggest estimating your taxable income and tax liability and comparing with estimated withholding - if the difference is less than $1000 - you do not need to pay estimate taxes – and may just pay your tax liability by Apr 15 of following year.3) Will I lose my unemployment benefits? What if I get no work in January? I haven't returned to full time work. I did make about $7k in November contracting. (I get $1k/day to contract, but it's not consistent).If you have separate earning - your unemployment benefits MIGHT be affected - it is hard to tell if they will be just reduced or eliminated. Unemployment benefits are determined on weekly basis - so you might be not eligible for some weeks and still eligible for others.
Let me know if you need help to estimate your tax liability.
See page 6 - http://www.labor.ny.gov/formsdocs/ui/TC318.3e.pdf - What is considered work?
You are considered employed on any day when you perform any services -even an hour or less- in self-employment, on a free-lance basis or for someone else. It makes no difference whether this work is in covered employment or whether you get paid for that day. For example, work on a straight commission basis is employment even though you may not receive the commission until some time later or even though no sales are made nor any compensation received.
If you are involved in free-lance work, self-employment, starting a business or doing “favors” for another business, you should call the Telephone Claims Center and give all details BEFORE claiming benefits.Again - let me know if you need any help - to estimate your tax liability.
So. I guess the only remaining question is what do I do now that I have already claimed unemployment? Also, how can I estimate taxes if I just started contracting in the final quarter of the year?
what do I do now that I have already claimed unemployment?Generally - you need to report your working and your income - the unemployment office will verify your eligibility for each period - and if overpaid - you would need to pay back...If paid back in 2012 - these benefits will not be included into your 2012 taxable income. how can I estimate taxes if I just started contracting in the final quarter of the year?Taxes are based on your annual income - income that you will receive in 2012 - you need to estimate your business (self-employment) income = (gross income) - (expected deductions for business expenses).Also - you need include your income from wages, unemployment benefits, etc.Your tax liability will be based on your total income, filing status, deductions, etc.You also need to estimate your withholding - to verify expected net tax liability.
I understand that
However, I was not self employed from Janu - August so how can I estimate taxes?
I only started contracting n November
so, my company withheld my taxes from January - August
Then even for the contract trips they are withhoding taxes
Taxes are based on your annual income - not monthly income - so include all your income for the whole year. Taxes withheld will be credited toward your net tax liability.
Okay, but I need not make any quarterly payments for this year
If you provide amounts - I will help you with estimations.
How much do you charge to take care of my taxes for me?
I'll need to do this year, and next year. Next year I will be contracting. I have an Incorporation set up in nevada to reduce self employment taxes, and I live in NYC
I'll be contracting quite a bit next year
Based on estimations - you will decide if quarterly payments are needed. Without estimations – it is impossible to tell…
okay, but if I was working full time, then became self employed in the 4th quarter I wouldn't have to pay the difference until next year, correct?
I understand taxes and estimates are based on your annual salary
But, if you had been working full time, you don't make quarterly taxes...your employer withholds it weekly
How much do you charge to take care of my taxes for me?I may estimate your possible cost for tax preparation - but I may not prepare your tax returns due to rules on this site. Posts are for general information, and are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), and do not establish a professional-client relationship.
But, still one of my questions is unanswered
I was working full time until August, so my company was withholding taxes from my salary
So, if I am contracting in november onwards
could it be possible for me to pay quarterly taxes?
since all income taxes have already been paid to the government
up until the november/december contract revenue
Yes - it is possible - based on your tax liability.
I don't just pay that in April at tax time
I would pay 4th quarter in
January 15, 2013
4th Quarter 2012 Estimated Tax Payment Due
Generally, you will avoid a penalty for underpayment of estimated tax if you pay at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.
If you are required to pay estimate taxes - making just one payment in January might not help you. If based on your estimate - you are required to pay quarterly - I suggest paying as soon as possible to minimize underpayment penalties.
I suggested to help you with estimate.
I am just little confused with your response.. Let me know if you need any help.