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What taxes do i pay as a independent contractor?
Lets say im a Independent Contractor (soul proprietorship) in NY state(not nyc) working for a employer in Arizona. Which taxes would I have to pay on my income? ie. federal, state, self employment taxes Also do I have to pay in quarterly or do I have the option to file once a year? Thanks.
Public Comments
- You would have to file a federal return to pay your income tax and self-employment tax. You would file an AZ non-resident income tax and a NY resident income tax. You would get a credit on the NY return for taxes paid to AZ. You are required to pay taxes quarterly for both the federal and states taxes. If your 2008 income was under $150,000 your 2009 estimates would be an amount equal to your 2008 tax paid. If your 2008 income was above $150,000 then the exception to penalty is 1.10% of the 2008 tax paid. Otherwise you will be to estimate the total tax for 2009 and pay in at least 90% quarterly.
- About 30%. For exact amount complete Form 1040ES page3 from irs.gov After the first year if you do not pay quarterly you get a penalty that is about $200.
