Are you recently self-employed and ready to work with a tax filing service in Des Moines, IA to help ensure that the tax preparation process goes smoothly? Before you begin working with a professional, it’s a good idea to familiarize yourself with some basic guidelines related to self-employment taxes.
Can I be classified as self-employed?
Under IRS regulations, you are considered to be self-employed if you run a business or perform services as an independent contractor or sole proprietor, your business can be classified as a partnership or you otherwise work for yourself, such as in a part-time business that you operate.
What are the basics of tax filing for those who are self-employed?
Self-employed individuals must typically file their tax returns annually and make estimated tax payments each quarter. Those who are self-employed are responsible for paying self-employment tax (SE tax), which is the equivalent of Medicare and Social Security taxes that those who are not self-employed have withheld from their taxes.
Income tax payments are also required for those taxpayers who are classified as self-employed and who had net earnings of $400 or more in a tax year that they earned through self-employment.
How do my annual taxes work?
When filing your annual tax return as a self-employed individual, look for IRS Schedule C or Schedule C-EZ (both available on the IRS website). If your expenses were $5,000 or less, you may be eligible to complete the less complex Schedule C-EZ. Talk to your tax services professional or read the instructions that accompany these forms on the IRS website to determine which form you should complete.
Schedule SE (Form 1040), Self-Employment Tax is the form you’ll need to complete to file your Social Security and Medicare taxes. This form will require information from the aforementioned Schedule C or Schedule C-EZ.
What do I need to know about quarterly tax filing?
If you are self-employed, you are responsible for making quarterly tax payments, which cover the Social Security and Medicare taxes you owe, as well as your standard income tax.
To determine the amount of your quarterly payments, use IRS Form 1040-ES, Estimated Tax for Individuals, which is available on the IRS website. Be sure to have your annual tax return from the previous year handy as you complete this form.
For more guidance or for links to specific tax forms, visit https://www.irs.gov/individuals/self-employed.
Now that you’re up to speed on the basics of self-employment taxes, you’re ready to start researching and find a tax filing service in Des Moines, IA. Accounting & Tax Professionals, PLC is proud to offer unparalleled service and expertise to customers in the area.
Our tax professionals offer personal and business tax services, including, but not limited to, tax resolution, tax audit representation, tax preparation, small business accounting, notary services, payroll, investment consultation and financial and tax planning. We are members of the Better Business Bureau, the Grimes Chamber of Commerce, the National Association of Enrolled Agents and the National Association of Tax Practitioners. We look forward to providing you with the peace of mind you need so that you can focus on developing your business!