Independent contractor which tax form

As an employee, state taxes are generally due for income earned in a certain state. For example, if you live in Nevada but work remotely for a company in California, you would likely pay CA state tax as reported on your Form W However, as an independent contractor receiving a form, if you live in a state with lower or even no state income tax and you perform remote work for a company in a state with this tax, you may not owe it.

If you live in Nevada and work from home with no state income tax, but work as a contractor for a company in California, you would likely not owe CA state tax. Instead, you are responsible for federal income tax and self-employment tax. There are a few special cases where, even though you fit the definition of an independent contractor, you are considered a statutory employee an employee by statute for tax purposes. If you are a statutory employee, your employer is not responsible for withholding income taxes from your pay, but Social Security and Medicare taxes will be withheld.

To be considered a statutory employee, all 3 of the following statements must be true:. As an employee, you will receive periodic paychecks and, for each tax year, a W-2 from your employer s by January 31 of the following year.

If you also have independent contract income, that might be reported via one or more forms. By April 15 of the subsequent tax year, you would prepare, file, or e-file your income tax returns to the IRS and states.

The eFile. Church employee income is income received from a church or church-controlled organization, not including income paid to ministers or members of religious orders. If you are a minister or priest, rabbi, etc. Under certain circumstances, if you have a conscientious objection to Social Security because of your membership in a religious sect, you may be able to exempt your net income from self-employment tax by filing Form If you receive salaries, fees, allowances, or other compensation housing, food for doing work as a minister or member of a religious order, you generally have to pay self-employment tax on your income.

You may exempt your ministerial income from self-employment tax if you file Form and you receive an approval from the IRS. Income derived from other sources may still be subject to self-employment tax. However, partnership tax returns and recordkeeping can get very complicated, so the IRS has made an exception.

If a husband and wife are the only members of a joint venture a fancy name for a business owned by two or more people , then they may agree together to elect for their business NOT to be treated as a partnership for federal tax purposes. Instead, it will be a Qualified Joint Venture. Then, the couple files a joint tax return and prepares a separate Schedule C for each spouse, taking into account each spouse's share of income and loss derived from the business as if they were each a sole proprietor.

Only couples that are married filing jointly can elect for their business to be a Qualified Joint Venture. Corporations and LLC's do not qualify for this election. Get Your Tax Refund Date. Schedule C is used to report your income and expenses, so you can calculate whether your business earned a profit or reported a loss for the year. One of the benefits of being self-employed is that you can deduct business-related expenses to reduce your taxable income.

The tax deductions you can claim vary based on the type of business you have. No matter what type of business you run, you can typically deduct any business insurance premiums you pay.

And if you get audited, the IRS will want to see them. Typically, employers and employees are each responsible for paying half of these taxes. When you file your annual tax return, you can estimate your taxes for the next year using form ES.

You can use the vouchers in the ES booklet to make your payments by mail or you can pay online. Quarterly payments are due in April, June, September and January of the following year.

All of the forms we discussed in this article come with instructions that explain how and when you need to complete them. And the IRS website has up-to-date tax information for self-employed professionals. We specialized in providing fast, easy and affordable business insurance options for self-employed workers.

Simply start our free instant quote online to review your options, purchase coverage and get your certificate of insurance if you need one. Report the employee's income and social security taxes withheld and other information. Report payment information to the IRS and the person or business that received the payment.

How do you determine if a worker is an employee or an independent contractor? Answer: The determination can be complex and depends on the facts and circumstances of each case. There are three basic categories of factors that are relevant to determining a worker's classification: Behavioral control whether there's a right to direct or control how the worker does the work , Financial control whether there's a right to direct or control the business part of the work , and Relationship of the parties how the business and worker perceive the relationship.

Page Last Reviewed or Updated: Nov