Are You An Independent Contractor That Knows Your Options?
Do you know what taxes you need to pay?
Are you familiar with what tax forms you need to file?
Do you have a tax strategy?
There are many potential pitfalls that independent contractors should be aware of. Receiving a 1099 for income paid to you means it is time for you to review your options as an independent contractor. The key is to understand what taxes you are responsible for and what tax forms you need to file.
As an independent contractor, not being prepared at the year-end can be very stressful. This is especially true if you find out you owe a large amount of money for taxes that you didn’t plan for.
Knowledge is Power
At Makara and Associates, we offer a FREE eBook: “Independent Contractor Taxes…Know Your Options”, found in our online library on our website. It’s a quick download and reviews the six things you should be aware of as an independent contractor, which I have also discussed in my previous series of blog posts.
Six Options to Review
• Assure that you have correctly determined your independent contractor status based on the three categories the Internal Revenue Services has set up.
• Consider contacting a tax or legal professional to guide you through your situation. Practicing the correct procedures will benefit you as your business continues to grow.
• Set up a separate account for your business. This avoids any problems with how the funds were deposited and the expenses were paid.
• Know what your business expenses are. Plan for your estimated taxes that are due on a quarterly basis, and know what else you need to withhold.
• Know your business deductions, and keep up with any changes. Do you know there are two options for expensing the cost of mileage for business purposes?
• Make sure you meet with a tax professional as soon as possible, so you will be prepared when you file your tax returns, especially the first year. Don’t become one of the taxpayers who are shocked when instead of receiving a tax refund they find out they owe a considerable amount of money.
Work With a Professional
When you work with the staff at Makara and Associates, you work with a team that is committed to education and providing quality services to each of our clients based on our knowledge and specialization in all the services we offer. We are ready to assist you with all your accounting needs.
Would you like to review your tax situation? Contact us online or call our Naples Office at (239) 384-9688 or our Fort Myers Office at (239) 768-5008.
-Mark
This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.
LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.
