Filing Self Employed Tax Return Online
A Quick Guide to Filing Self Employed Tax Return Online
Filing self employed tax return online can be a bit more complicated than if you’re employed by someone else. But don’t worry – EZOnlineTaxes.com can help you if you’re filing taxes as self employed quickly and easily, without any headaches. Let’s take a look at what you need to know and how EZOnlineTaxes.com can help.
If you’re self-employed, you have different tax obligations. Whether you’re working from home, working from a business location, or doing a variety of trades, there are tax forms to be filed on a regular basis.
Filing Taxes As Self Employed Is Simple
This is a touchy topic with the IRS, and one that is subject to various interpretations. Many employers want to pay workers classified as a sub-contractor. The main reason for this is to save money and to eliminate onerous filing of payroll forms. The IRS, on the other hand, wants the opposite.
For many years, the IRS has used a checklist to determine if a worker is an employee or a bona fide sub-contractor. Recently, they have been using a simple test known as a common law rule. You can read about it here. This rule is simple and self-explanatory and has resulted in classifying many more workers as employees.
You need to be aware too, the IRS pays a lot of attention to this issue. If you have bona fide employees, pay them as such and don’t try to treat them as subcontractors as a lot of employers do. It’s really not worth the risk.
Filing Taxes When Self Employed Won’t Cost You Anymore Either
If you’re filing self employed tax return online, you’ll find there are a few additional forms you have to file. First, you’ll need to file a Schedule C form with your Form 1040 personal tax return. On this form, your gross income from your trade or profession is entered. Then, all expenses that were incurred for this business are entered.
These would be such things as advertising, vehicle mileage, supplies, depreciation of certain assets and wages for hired employees. You’ll also need to file a Schedule SE form, which is used to calculate the self-employment tax owed on your net earnings from self-employment.
In addition, if you had one or more employees working for you during the year, you’ll need to prepare and file Forms W-2 for each employee. Once that is done, you need to send a copy of each W-2 to the Social Security Administration and to the comptroller of the state where your business is located.
Do You Know How To Pay Taxes When Self Employed?
You will need to file a quarterly 941 form for the IRS and an annual Form 940 payroll form for the IRS. Depending on the state where you’re located, there will be certain state returns and state unemployment forms as well.
Plus, if you paid independent contractors $600 or more during the year, you’ll need to file Forms 1099-NEC for each contractor. Just remember, you, as the self employed person, do not get a W-2 from the business.
Filing a self employed tax return online will result in taxes that you will owe from that entity, are based on the net profit shown on Schedule C. The first tax calculated is the self employment tax, at a rate of 15.3%. However, you do get a slight break. The net profit from Schedule C is multiplied by 92.35% and then by 15.3%. This tax is due by April 15 when you file your personal tax return. Keep in mind though, if your federal tax balance due is $1,000 or more, you should pay those taxes by filing estimated tax payments throughout the year.
What Are Independent Contractor Taxes?
Keeping track of your business expenses and deductions is absolutely essential! By keeping detailed records and itemizing every expense, you can maximize your deductions and keep more money in your pocket come tax time.
It’s important to be meticulous when it comes to documenting your expenses. From the cost of materials to gas money spent driving to client meetings, every penny counts. To make things easier, consider using an online tool like Quickbooks or an Excel spreadsheet to keep your records organized and easily accessible.
Once you have a comprehensive list of your expenses, it’s time to categorize them in a way that makes sense for tax purposes. This includes travel costs, promotional materials, equipment purchases, professional service fees, membership fees, office supplies, education costs, and any other expenses related to your freelance business. And don’t forget – if you use your car for business purposes, be sure to keep a mileage log so you can deduct the appropriate amount.
Remember, all income earned must be reported to the IRS – even if you don’t receive a Form 1099-NEC. And if you expect to owe more than $1,000 in taxes this year, you’ll need to make estimated payments throughout the year using Form 1040 ES. Failure to do so could result in penalties at tax time!
Last but not least, the new Form 1099-K is used by self-employed individuals who receive payments via electronically-tracked services like credit card processors or PayPal. So be sure to keep track of all your income sources and report them accordingly.
Filing self employed tax return online doesn’t have to be complicated or stressful. With EZOnlineTaxes.com, we’ll ask you simple questions and prepare all the forms for you. All you need to do is review your return and e-file them – it’s that easy! We’ll even calculate your self-employment tax for you so you don’t have to worry about it. And if you have any questions, our friendly customer service team is always ready to help when you need it. So why wait? Get started on your taxes today.
Don’t let tax time stress you out – do your due diligence and keep accurate records of your business expenses and income. With a little effort and organization, you can maximize your deductions and keep more of your hard-earned money in your pocket!
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