You are (by default, if you have set up a formal business entity with your state) a sole proprietor
What this means, is that you should use Schedule C, as an attachment to your tax return to report this income (AND the expenses of your business) which will, in turn generate a profit (or loss)
How do I know how much money to set aside with each payment to make sure I have enough for taxes owed
and it's this profit (if you have one) on which you'll pay taxes - it will flow to line 12 (business income or loss) on your 1040
I would take the schedule c (linked above) and use it to estimate your profit
(then divide by 4)
and then use (IF you'll HAVE a profit) this form
to send in the estimated payments, quarterly
So if I am being paid via a corporate credit card, how do I report my earnings. Will the company that I am getting paid from turn something in or do I have to supply to the IRS during tax time all the invoices that I have collected payment on.
They'll send you a 1099-MISC ... supposed to in JAnuary
BUT you don't attach 1099 to the return, you just report the income on that top line of the schedule C (essentially your business income statement)
THe IRS SYSTEM WILL match your income to the copy of the 1099 thy'll get
So far the company that is paying me does not have my SS number since I was being paid via credit card. I will need to give them this information to be sent the 1099-MISC correct
Yes, you SHOULD have had you complete a W-9 , which is the "setup" document for issuing the 1099
sorry for the typo "they" should have ...
Perfect. That is what I need to know.
Yep ... be proactive and ask them about it, should make things go smoothly, going forward
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