AboutGlenn D Schnabel Expertise I can answer most federal individual income tax questions.
I can not provide legal advise.
Experience I have worked for a CPA firm for over 11 years.
I have worked in private as well as government
I have recently been running a tax preparation office, mainly focusing on
individual income taxes
Organizations I have been affiliated with managing condo associations and as a member of a coalition to educate condo owners as to their rights and responsibilities.
Education/Credentials I have my B.S.B.A in Business Administration . Concentration in Accounting
I have gone to yearly tax seminars and have tried to keep up with the
evolving tax changes
Awards and Honors Over my years I have received local awards for contributions to worthy
organizations.
Past/Present Clients This, of course remains confidential
Expert: Glenn D Schnabel Date: 7/25/2008 Subject: Return to Job market as a Private Contractor
Question Mr. Schnabel,
I am a retiree returning to the job market as a private contractor. My question is how do I file for Social Security, Federal,State Taxes and Employment withholdings during the year. Do I just put the calculated withholding amount away in an interest saving account until I file at the end of the year?
Thank you.
Answer Robert,
Thank you for your question.
1)My question is how do I file for Social Security, Federal,State Taxes and Employment withholdings during the year.
As a self employed individual, you will be filing a form 1040 Schedule C and Form 1040 Schedule SE. You will be able to take deductions against the income. You will receive a form 1099 from your client at the end of the year. You should keep good records to account for your deductions.
You should start paying estimated taxes to Federal and State.
The Federal is on form 1040 ES. You pay this quarterly (4/15/08. 6/15/08, 9/15/08, 1/15/09 for the calendar year 2008.
You figure your income less deductions less itemized deductions less
exemptions to arrive at taxable income . Then figure your tax rate. Then you add 15.3 percent for Fica and Medicare (computed as net schedule C times .9235 times 15.3 percent to arrive at self employment tax). Add the regular tax to the self employment tax.
In short Whatever you get , set aside at least 20% fed, 15.3% fica and pay quarterly. Also pay Estimated taxes to your state. State can range from 3% to 8% of federal tax, depending in the state.
