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taxes must be paid either way

Posted By: Lisa on 2008-04-08
In Reply to: Not necessarily. Depends on the state and status. sm - If sole proprietor, not always needed.

No matter type of business you set up, whether it be sole prop., LLC, etc., you still have to pay taxes on that income.  So either way, some sort of paperwork will have to be filed with your state when it comes to tax time.  The state and the feds want their cut of your profit.

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You have your W2 showing very clearly those taxes were paid. MQ is responsible for those taxes
because you were a statutory employee. That is the responsibility of the employer to pay those just as though you were an employee.
You MUST have 90% of your taxes paid by Dec 15 or they will penalize you.
My DH was having more taxes taken out of his pay to cover me but not enough and we were always getting penalized. Now he's smartened up and raised how much they can take. Hopefully this year will be better.
Always paid my taxes and on time so never
had to worry about this, but I would be leary of any company wanting $$ for services.  I'd just call the IRS and tell them the situation and see what they say.  Of course, this late in the tax season getting through may be an impossible task.  If you have a local IRS office it might be better to go talk to them in person. 
Not my place to make sure her taxes are paid
I can only take care of my end. Not in her head when April comes around so??
Today I heard you have to had paid that much in taxes
Heard that today and I think it is only fair if they do it that way.  Cannot see how this will help as all it does is push this country further into debt.  As a nation we cannot pay our bills as such and then they think that by giving people an extra $800 that it will help with our economy -- rather have them keep it and get us out of debt.   Here in Oregon, people get money back in state taxes who have not even paid because of the child credit and I do not agree with that -- will get flamed for that I am sure but feel that people need to be responsible for raising their own kids and not ask the government or me to do it. 
right, taxes are paid in the state where you earn 'em...
since you work at home, you earned your wages in your state and pay them to your state.
Well, my husband and I paid 58% last year in taxes. I swear! sm
I won't tell you our gross, but it's above average, we both work 70+ hours a week and we are struggling to pay our bills - parents of 3 young children.

I am scared to death of Democrats being back in office. GW at least wants tax breaks for families like ours. If the Dems are in office I'm afraid we'll be taxed more to help pay for people like my niece who had babies beginning at age 13 and has never had a job in her life. How can this NOT outrage anyone - yet I know there are people out there who tell me to get over it, it's life, those other people are 'entitled' to our money. It's absolutely vile and disgusting.
to cowgirl - Last I knew, last year the job paid $25,000/year no taxes, etc.
The hospital was bombed about a year ago, but not a lot of damage, very minimal damage.
Excuse me but federal taxes are paid as employee by employee
The ONLY difference in IC is you pay the ENTIRE amount of the SS which is the 15.25%, as an employee you only pay 7.75%.  And you can easily make up that difference in deductions.  As an employee you just have someone else manage your withholdings and as an IC you do it yourself.  I have much more usable income being an IC and not an employee and I am strict about putting aside what I need to.  But everyone always says you have to pay your own taxes, well your employer does not PAY them for you -- except 7.75% of SS, they merely withhold it for you.  As an IC you are the employer. 
For QA consulting I'm paid per hour; QA instructing (college) paid salary, QA editing paid per li
I am an IC and work for two different MTSOs as well as instruct at a business college.
As an IC when paying taxes, are SS and fed taxes sent SM
to the same place?
if mt paid 9, editor paid 4 or 5...how can company charge 14 and make it..sm

I know the going rate in our area is 14 cents per line.  As MTs most companies here pay us 8 or 9 cents a line.  Now add in the Editor rate at 4 or 5 per line..you are paying OUT more than you can charge a line.  How would companies stay in biz?

Unless all work is sent by the company overseas at pennies per line, this would not pay for a company.

just curious how this works out

But how much are the US EDs gonna be paid? Typically this work is paid at 2-3 cpl. nm
You don't get paid an hourly rate you get paid by line - sm
so because of how you are paid (not an hourly rate) you don't get OT, especially if you are an IC.
I would move on. I think it is so unfair not to be paid for spaces! I think we should get paid

per keystroke, but that'll never happen.  I just think that these national companies are going to keep finding ways to cheat us.  I found a job working for a hospital as an employee, paid hourly plus incentive, and they let us expand everything!  Somebody's gonna have to kill me to make me give up this job.  I will never go back to the national's again.

I feel for you though.  I know that for us MTs those good jobs are few and far between and some have little choice but to work for the nationals.  I just happened to luck into the job I have now.  I just applied at the right time. 

Good luck to you whatever you decide.

If those companies paid a fair wage, and paid more
all came out equal, people wouldn't feel the need to try to make up the deficit by going for the good stuff. I actually prefer the harder, juicier reports. But I can't make a living doing only that, because the pay is not commensurate with the difficulty. So even though I prefer not to, sometimes I have to pick up some of the easier, more boring 'line-o-matic' reports just to make ends meet. Tell your MTSO to make it work their while, and MTs will stop taking all the easy work away that you obviously would prefer to keep for yourself.
You wont show UE being paid because it is employer paid -
the employee will never have to pay this.
What you "should" be paid and what you "are" paid

sadly are two very different things.  Good luck on demanding more..because someone else will just come along and take it for what they offer and they know it. 

THANK YOU! That is my point. She still pays taxes, her DH still pays taxes...

so who exactly is getting cheated?  And just who are you talking about when you talk about whether it is "fair" or not.  I don't give a crap how much taxes my neighbor pays.  It's none of my business.  And if I found out they were paying less in taxes than me, I would ask them how they heck are they doing it so I can do it too!

I just want ask, is it necessary to get personal and insult?  You disagree with me, fine.  But I've been called a liar, a cheat, a no-ingetrity thief, my intelligence has been insulted, and I have had my parenting skills questioned.  That is a little over the top.  If you cannot debate an issue without resulting to personal attacks, then YOU are the stunted one!

It is a very good thing that some of you work at home, ALONE!  You are sorely lacking in people skills and diplomacy.  Let me guess, when you worked in the office you were one of those girls who didn't like to share her desk, griped if someone dropped a crumb on your desk, and kept track of everyone's breaks, lunches, and line counts just so you could tattle to the supervisor!  I've worked women like you, it was like working with kindergarteners.  That's why I came home to work.  Do us all a favor, looking in the mirror, count your wrinkles, and realize that this isn't high school anymore!

10$ late if invoice is not paid within 10 days. At day 15 work stops until invoice is paid. Hardly
I also keep track of all of the write offs!!
Do you also pay your own taxes?
that means it works out to about $13 an hour.

Do you think when you are working for someone else that "they pay your taxes?"  We all pay our own taxes except for the additional 7.5% of SS as an IC you pay.  And I will bet that as an IC/MTSO I pay a lot less taxes than you do and I make more than you do.  I cannot understand the mentality of people that say "you pay your own taxes."   Your employer just "holds your money and pays your taxes."  I am just responsible enough to put the money aside and pay mine but as a IC/MTSO with all my deductions I pay on 20 to 25% of my gross and I am able to put aside $700 to $1000 per month in my retirement which is totally deductable.  Your statement is totally incorrect.


IC - taxes

I am never sure whether to classify myself as an IC or small  MTSO as I have my own accounts.  But where I see a lot of the problem is that the doctors are not making as much as they used to, due to insurance company reimbursement, etc.  They are trying to save every penny that they can just like we do.   I keep my line charges probably quite low according to many standards but I make a a very good living and I cannot see charging the doctors 15 to 18 cents per line when I make very decent money at 11 to 12 cpl -- gross lines.  I also get GREAT tax breaks and though I have to pay the other half of the SS self employment, I still bring home more of a dollar than working for someone else.   I have also found it hard to find anybody that will subcontract to me that is truly dedicated and will work hard. (I pay  8 to 9 cents per gross line  and I deliver tapes and do all the printing, pick ups and deliveries)  I know that kids get sick, there are football games, etc. but this is still a job and you gotta put it first sometimes.   It is hard to find anyone that will work the TAT of  20 to 24 hours by the time I get the tapes to them.   Then that leaves the burden on me.   So I mostly stick to my accounts that bring me in $50 to $55 per year (and this gives me my benefits) and have turned down accounts because I don't want the hassle of the IC's to me and they could be going overseas right now.  But I think that the insurance companies are behind this more than the docs.  When your MRI is interpreted over in India -- do you get a break on the interpretation -- no but the insurance company gets a break on what they pay out so who pockets it???? 

My thoughts and I am sure I will get a lot of disgreements but that is okay we are all entitled to our thoughts.  Oh yea for this amount of money I do work 28 to 32 to hours per week-- just quit an in house part-time job as they wanted me at least 24 hours now, started out at 10 to 12 but the docs found out that they could make more money paying me to transcribe their tapes than to type their own notes in the EMR's even with templates.  So we will be around for a while.   Oh yea if I would have kept on with both jobs would have easily made $65 K but working 50 hours a week was getting to be a bit much.  


IC taxes

One suggestion that I have for all of you that are questioning IC taxes is to look at your past tax refunds when you were an employee and see what percentage was withheld and do about the same.  Yes there is that extra 7.5 for SS but it  is also a deduction and you can look to find 7.5% of your pay as a deduction whether it be in the form of your own retirement fund, etc.  When I saw that I was paying so much to the IRS, I decided that if I could afford that I could start my own retirement fund and did it.  I now contribute close to $1000 to it per month.  So go online, get an old copy of Turbo Tax and run off the schedule C's and see what deductions can be taken for a small business and then see what you can do to save in taxes.   Look at your old tax returns and if you are married have your husband over withold if you can't do it yourself.  You are not paying that much more when you work for yourself you are just in charge of paying them yourself and not allowing someone else to hold it out from your check.   But look at old returns, plan, plan and plan.  When you look at your net vs your gross that will tell you what percentage your employer is holding out.   Either as an employee or an IC we all pay our "OWN" taxes but as an employee someone just does it for you.   Good  luck to all of you.   Patti

You get to deduct sooooo much, part of your housing, utilities, any supplies such as printer paper.   Last year I made about 40,000 and once the deductions were complete, it was right at about 8000 (have kids to deduct of course so that helped)
I live in Alabama and have always been employed in Georgia.  Other than the time I was an IC, we always filed both Alabama and Georgia tax, whether I did the work at home or not.  My husband works in Alabama.  The amount of the tax always pretty much balanced out.  In fact, I usually got a refund from both states, just more for one than the other.  As an IC, I only file an Alabama return, as that is where my "home business" is located, no matter where my "clients" are.   
If you are talking about tax deduction the answer is no.  If you are an employee and the company is taking out your taxes, etc. you are not considered an independent contractor.  If you are SELF-EMPLOYEED...then the answer would be yes.
Maybe they do that because they don't have to pay SS, or withhold any taxes for them since they don't live here.  Maybe we need to put the bug into the government's ear that they are losing out on a lot of money here by allowing them to do this and you know how the government loves money.    Just a thought. 
IC and taxes
Is it a pain to do taxes when you are an IC?  What do you all do?
IC taxes
Go here: https://www.eftpssouth.com/Eftps/

This is for federal taxes and you can pay on a weekly, daily, monthly, etc basis. As far as expenses deductible, you really need to do some research - you can deduct all expenses related to the running of your business. Best thing to do is have a room in the home/apt totally devoted to work and you can then take that % of home as a deduction. You obviously know very little about this stuff or you wouldn't ask that question. I would suggest getting the IRS instruction booklet on home office and the one on business expenses and reading it thru thoroughly. If you are not good at this stuff, then hire someone to do your first year and learn.
IC taxes
Will do that. Thanks for your input.

They are right in that the SS is 15.7% but remember when you were working for someone they held out 7.5% from your check.  Look back at your checks as an employee and see what was held out -- the only diference from being an IC is that you have to be responsible to pay the taxes and not have someone withold them for you.   Also look to see what deductions you have, take those off and you pay 15.whatever of that amount in SS.  It all depends on what you are making.   I start out with 45K+ and pay SS on about 15K.  But I have a retirement fund that I am contributing to and that takes a lot off.   But if you look at your paycheck as an employee you will see that 20 to 25% is being taken out of your check and you ARE paying those, someone just makes sure it is deducted.   If you husband is working as an employee (my ex-was) I had him hold out as single none and we always got something back.     Either way as an employee or an an IC -- we allpay it in the end.

IC Taxes??

I have recently taken a job as an IC, this is my first IC position and I was wondering if any of you wise folks could give me some advise regarding income taxes and such.

In the past I have always used TaxCut or TurboTax for my income taxes.  Is there a similar product for the 'self employed' that is as helpful?  Does anyone have any experience with any of these?

Also, MUST I pre-pay taxes and/or SSI quarterly?  I ALWAYS get all my taxes I pay in back in a refund and my income is essentially the same as my previous employment.


You actually mean net? After taxes? nm
Haven't started mine, but for the first time in ages, I have only one 1099! Should be pretty simple.
I am new to this IC tax stuff.  This is my first year doing this, and I have no idea what I am in for at tax time.  I only work part time, and I bring in about 350 every two weeks.  Should I be paying in quarterly?  Any tips for tax time?  Thanks in advance for your help. 
Taxes as IC
Are you married -- did you have your husband over withold to cover your taxes?  Do you have receipts for any programs, computer, etc. that you bought?  Do you use part of your house solely for your business?  Do you use an internet service for your business, phone?   You need to buy Turbo Tax or talk to an accountant if you are unsure as to what to claim and not claim.   But anything that pertains to your business is deductible.   Turbo Tax takes you through it step by step.  Mileage to the bank to deposit, buy supplies, any business related errand is deductile.  You will have to pay 15% on your NET income that is why you want as many deductions as you can get.   Again, if you are married have your hubbie over withhold even if it is a certain amount of one less deduction if you have kids to cover your taxes.  When you see what you owe -- if you do this year you can then divide that by how may pay periods and have him withold that much.  But dig for those deductions.    E-mail me with any questions. 
Taxes (sm)
We used to pay a CPA at the end of the year to do our taxes, claimed all our exemptions, equipment costs, office costs (if applicable), phone, etc.,on a Sched. C for me and my husband's W2, then we both were IC's and he did two Sched. C's and all he did was give us 4 slips for next year's "estimated" tax to send in a check quarterly. If we found we were making more, we were to call him and he would adjust our quarterly payment to more, it usually worked out. If you're an employee, then it will be different, I was self-employed, helped to keep track of all expenses, postage, phone, books, etc., anything to do with my profession. Perhaps you are not an IC but this worked for us, if you have kids, then the acct. would take this into consideration. Perhaps you'll get a "surprise" refund for the "kiddos." Good Luck! Have a "fruitful" year!

In 18 years of filing as an IC and owner, have never paid quarterly while married.  Always had my husband over withold and even some  years had to pay a little (under $500) but they have yet to question (knock on wood).   But my income and write-offs always stay about the same, every third year a new computer, then the next a printer, then some transcribers, etc.    The government does not care who or where the tax money comes from when filing as a joint return as long as they get it.   You are just combining your income as if each of you had a job but you are an I/C instead and don't have someone withholding from your earnings..   I always filed electronically and had my refund within a week.   Heck you can borrow the money to pay your taxes and they don't care as long as they get paid.  




Can anyone give me a list of things that I am able to deduct for working at home.  I am new at working at home and need some specifics.

Thank you!!

Unless you have a special reason for needing to pay H&R Block to do your taxes, you can do free file with H&R Block online.  You access it through www.irs.gov.  A lot of people don't know that there are companies out there where you can electronically file for free.  Most of them don't include free state filings, but my daughter found one last year that did both of hers for free.  It isn't a program that is widely publicized.  I only found out about it through a tax newsletter that I subscribe to.  We have two different businesses this year, though, and I'm not sure I'm going to have the knowledge to do everything, but I'm still going to give it a try.  They walk you step by step through the whole process.  You answer questions at the beginning and it brings up forms and steps in the order you need to file.  It's worth looking into.  Actually the IRS has a lot of helpful information regarding filing.  Tax Hotline calls it "surprisingly good," and said it's recently been redesigned to make it even more useful.  Why pay somebody to do something you can do yourself?
IC - taxes, etc.
Hi, I'm an IC for a company and am considered self-employed. I am having H&R do mine for the first time. I am going to check into deductions for expenses. I am hoping for the best.
I have used H&R Block in the past about 4 years ago I think. It was a lot more expensive than I thought it would be, around $200 I think, but I had some extra stuff to do because of some divorce issues and they charged by every form they have to do. But on the other hand it was worth it because it was my first year as IC and after that I just followed what they had done to do the next years' taxes using TaxCut myself.
I know for an IC we have to fill out Schedule C and Form 8829 for expenses. But do we HAVE to fill out Part III, depreciation of the house? I only made some $1400 (working very, very, very contingent) so why would I need to do that? I had a lot of expenses, though, to write off as I had computer repair, monitor, foot pedal, etc. Help
You pay the taxes for the state where you reside.  You don't have to pay state taxes for the state your company is physically located in.  You should receive a 1099 from your client and that is what you use to file your taxes.  It may be best to have an accountant do your taxes for you this year just so you get answers and feel confident enough to do your own.  Good luck 
Hi, Pat. I have also been doing a lot of research on home office deductions since this is the first year I have had a mortgage instead of just renting. It is my understanding that if you deduct for portion of your home mortgage interests and taxes for business office that you also have to do the depreciation part too. If you don't fill it in, it will be still be counted in the end as if you did anyway when you sell your home since you took the mortgage deduction and depreciation goes along with it. You wouldn't have to pay taxes on profit of the sale on the business portion of your home since they changed that in the last few years (I think it is something like up to 250,000 profit per single filer) but you would have to pay taxes on the depreciation even if you didn't claim it. Hope this makes some sense. I think it's form 505 on IRS website that has the info.  It's all really confusing. Was much simpler when I was renting!!
Taxes again!
Thanks so much for all the good info on taxes! You "guys" are great! What a wonderful source of information over the years on everything--not just transcription. Thanks again all who answered me. You have been a great help.
What % of pay should be set aside to pay taxes for an IC?
Can somebody please tell me what percentage of your pay needs to be set aside for paying your taxes if you are an independent contractor?  I certainly appreciate your help.
IC taxes
I agree that 30% should cover, however, I took 30% out of each check this year and I ended up overpaying by a couple thousand.  This year I'm taking a bit less out and putting some toward state tax.  Also, you can call the IRS.  They will spend time with you trying to figure out what to pay quarterly.
If you had another employee job that made you $4000 gross you still would have added that onto what you made from the other job for a combined income.  Also since taxes would have been withheld from that $4000  -- about 25 to 30% you would have not had the use of the entire $4000 just $2800 to $3200 and that equals out to what happened.  When you are an employee you still have to pay taxes, someone is just holding them for you and sending them in.  So you are not paying anything "extra" other than the 7.5% and you should have been able to come up with at least that in deductions.   So it equals out you just had the use of the money and chose not to save part of it for that vacation.