How to File Taxes as an Independent Contractor
As an independent contractor, you are responsible for filing your own local, state and federal taxes. Your independent contractor status means you exist as a business entity, with your own gross income, business expenses and net income. You must keep track of all your business receipts as well as payments you receive, and file excise tax forms on your gross income with city and state agencies and income taxes with the federal government and also with local agencies, if applicable.
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Instructions
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Keep accurate records detailing your gross income, as well as any expenses that you incur as an independent contractor. These expenses may include the cost of materials, business transportation other than commuting, business expenses that result from operating out of your home and legal or accounting fees. Calculate your net income by subtracting your business expenses from your gross income as an independent contractor.
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Mail estimated tax payments quarterly, based on your estimated income for the quarter. You will owe Social Security and Medicare taxes totaling 15.3 percent of your net income, as well as income taxes appropriate to your tax bracket. File federal income tax forms by April 15 of each year. Enter the amounts on the 1099 forms that you receive from individuals and companies you contract with, as well as any additional income that doesn't add up to enough to require 1099 forms. Fill out a Schedule C form detailing your business expenses. Fill out Schedule SE to calculate your self-employment tax and transfer these numbers to your personal income tax form to determine the final amount of your income tax liability.
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File city and state excise tax forms based on your gross income as an independent contractor, and file income taxes with local agencies as well, if your city and state require you to do so.
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