Home Improvement Contractor - Licensed Contractors

How does one pay Social Security and FICA taxes if they're an independent contractor?

I'm a part time independent contractor. The folks I work for give me a lump sum each month. I'll be filing a 1099 w/the IRS at the end of the year. How do I know how much, if any, social security and FICA taxes I'm supposed to pay?

Public Comments

1. you need to make quarterly estimated payments - federal and probably state - fed form is 1040-ES - you might be able to download it at www.irs.gov or order forms thru that website - in future years, make sure you make the pmts quarterly if you continue doing that type of work - or you might get penalized for late or underpayment of taxes - try and make your full year deposit by Dec 15th - Is the job you do legitimately considered by law to be an independent contractor type situation as opposed to an "employee" where they just don;t want to pay payroll taxes? If it's the second, then they should be paying you enough extra to cover the 7.65% EMPLOYERS FICA taxes that THEY should be paying
2. This is usually handled by making quarterly deposits to IRS. I suggest you call and inquire now about what you should be depositing. Since it is near the end of the year, and you will be filing taxes, you need to be prepared to pay approximately 20% on your yearly earnings. After you file the IRS will send forms for you to submit quarterly deposits.
3. You do not file a 1099 with the IRS. You use the information from that to fill out your Sch C; taking your business expenses and yada; thusly arriving at your bottom line net income figure. This number you run through a Sch SE to determine how much FICA/MEDICARE tax you owe. All these numbers go on your form 1040. You should go to IRS.GOV or use the free forms phone number and get a PUB 17 which gives you all your information.
4. You fill out a schedule SE with your tax return to calculate it and pay it.