Prepare to File a Federal Income Tax Return
If you are an independent contractor then you will receive a 1099 form which is similar to a W2 but there are no deductions taken out for federal or state taxes or any other deductions. Receiving a 1099 form indicates you are not an employee of a business. Your income will be reported to the IRS by way of this form.
I am very familiar with 1099 forms because I received one for some contracting work that I do. One of the first things that I noticed was there were no deductions taken out. I immediately knew that I had to take the steps necessary to make sure that tax deductions were paid to the IRS. As a contractor I don't have any benefits such as medical or dental or health insurance. There are other 1099 forms but the most common is the 1099 MISC income. I actually received two.
One of the other forms I received was a standard W2 from my regular employer. This form did have all of the necessary deductions taken out such as federal and state income taxes as well as social security and medicare. That's one of the advantages of working for a business all of those necessities are taken care of for you.
It doesn't matter if you are an independent contractor or an employee of a business it's a good idea to check to see that you have all of the appropriate forms necessary for filing your taxes. You can find some places to file your taxes for you at a cost. There are also some places that will file your taxes for free. Unfortunately the places that file for free will not normally prepare your business taxes, only your personal taxes. Just to be sure you may want to check around first. You may find a free tax service that will prepare your business taxes as well.
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Published by Melvin Richardson
speaker, coach , author -- My other interests include internet marketing, blogging, reading, writing View profile
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