Re: RE: Taxes & Deductions for Independent Contractors

[Susan W. Gallagher <sgallagher5 -at- cox -dot- net>]

Ken,
<disclaimer>I am not a lawyer or a tax accountant</disclaimer>
AFAIK, there is no hard and fast requirement to pay quarterly
estimated tax -- the only hard and fast rule is that all
owed taxes must be paid by April 15. I went from paying a
huge lump sum to filing no quarterly estimates when I 
transitioned back to full time 3 or so years ago.

>From the IRS website:
---begin quote---
Who Must Pay Estimated Tax 
If you had a tax liability for 2005, you may have to pay estimated tax for 2006. 

General Rule
You must pay estimated tax for 2006 if both of the following apply. 

You expect to owe at least $1,000 in tax for 2006, after subtracting your withholding and credits.

You expect your withholding and credits to be less than the smaller of: 

90% of the tax to be shown on your 2006 tax return, or

100% of the tax shown on your 2005 tax return. Your 2005 tax return must cover all 12 months. 
---end quote---

In other words, if you don't expect to owe more than $1,000,
you don't need to file estimates.

You can find more here:
http://www.irs.gov/publications/p505/ch02.html#d0e5152

HTH!
-Sue Gallagher





> Tax year 2005 was the first year I had to file as a 1099 contractor, and
> as of January 30, I'm now a "real" employee at my company earning a
> salary, getting benefits, and having income withheld via normal W-2.
> 
<snip> 
> 
> However, because I had to pay a large lump sum of non-withheld taxes
> now, I have been told I need to pay quarterly estimated taxes for all of
> 2006, even though I'll have taxes withheld by my employer from February
> to December...

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

WebWorks ePublisher Pro for Word features support for every major Help
format plus PDF, HTML and more. Flexible, precise, and efficient content 
delivery. Try it today!. http://www.webworks.com/techwr-l 

Doc-To-Help includes a one-click RoboHelp project converter. It's that easy.  Watch the demo at http://www.componentone.com/TECHWRL/DocToHelp2005

---
You are currently subscribed to TECHWR-L as archive -at- infoinfocus -dot- com -dot- 

To unsubscribe send a blank email to 
techwr-l-unsubscribe -at- lists -dot- techwr-l -dot- com
or visit http://lists.techwr-l.com/mailman/options/techwr-l/archive%40infoinfocus.com

To subscribe, send a blank email to techwr-l-join -at- lists -dot- techwr-l -dot- com

Send administrative questions to lisa -at- techwr-l -dot- com -dot-  Visit
http://www.techwr-l.com/techwhirl/ for more resources and info.