contract job taxes & the w-9 tax form

tackling income taxes

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what's in this lesson?

Speaking of confusing and taxes, let’s talk about what you need to keep in mind as a contract worker. The IRS really doesn’t make it easy on us. In this lesson, we’ll talk about contract job taxes and the W-9 tax form.

contract job taxes & the w-9 tax form

tackling income taxes

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contract job taxes & the w-9 tax form

tackling income taxes

Speaking of confusing and taxes, let’s talk about what you need to keep in mind as a contract worker. The IRS really doesn’t make it easy on us. In this lesson, we’ll talk about contract job taxes and the W-9 tax form.

Contract job taxes and W-9s

One key differentiator when it comes to how you file and pay taxes is your type of employment. There’s full-time employment, and there’s contract employment. With full-time employment, taxes can be a little more simple. As a contract worker, things can be more complicated, especially because contract employees tend to work with many employers in a given year.

 

What is contract job employment?

Generally, contract employees have been hired to carry out a specific set of responsibilities for a specific period of time. There’s typically a start and end date to the contract term, and it can be based off of a number of hours worked during which the employee is expected to accomplish certain things. That’s compared to a full-time employee, who, while still having a specific set of responsibilities, does not have an end date to their employment.

 

What is a W-9 tax form and what do you need to fill out?

At the start of the employment term, a contract employee needs to fill out a W-9 tax form. This is the equivalent to W-4 for a salaried employee. The form will include your personal info and your social security number. However, an important distinction between this and a W-4 is that this form does not ask you about withholding, meaning you won’t have taxes taken out of your paycheck at the time you receive it. Sadly, you’ll have to pay taxes on that income when you file your tax returns.

 

Invoicing

One key component of contract work is invoicing. Invoicing helps you keep track of the services you performed and the amount at which you perform them for. When completing a contract job, be sure to send invoices to your employer with the following details: – Your personal information – Services performed – Hourly rate, total hours worked, and total amount owed – Payment terms (how many days until payment is due) Not sure how to set up an invoice? There are millions of examples out there, check some tips out at the link below in the resources section and you’ll have enough to piece one together.

 

The 1099

When it comes time to filing your taxes, your employers will send 1099 tax forms to you for you to submit with your tax returns. You’ll get a separate 1099 for each contract job performed, and you’ll need to include all of them when submitting your returns.

We have a whooooole separate lesson on the 1099, so be sure to check that out to get answers to the rest of your questions.

 

Source(s): Intuit

what's in this lesson?

Speaking of confusing and taxes, let’s talk about what you need to keep in mind as a contract worker. The IRS really doesn’t make it easy on us. In this lesson, we’ll talk about contract job taxes and the W-9 tax form.

Transcript

Contract job taxes and W-9s

One key differentiator when it comes to how you file and pay taxes is your type of employment. There’s full-time employment, and there’s contract employment. With full-time employment, taxes can be a little more simple. As a contract worker, things can be more complicated, especially because contract employees tend to work with many employers in a given year.

 

What is contract job employment?

Generally, contract employees have been hired to carry out a specific set of responsibilities for a specific period of time. There’s typically a start and end date to the contract term, and it can be based off of a number of hours worked during which the employee is expected to accomplish certain things. That’s compared to a full-time employee, who, while still having a specific set of responsibilities, does not have an end date to their employment.

 

What is a W-9 tax form and what do you need to fill out?

At the start of the employment term, a contract employee needs to fill out a W-9 tax form. This is the equivalent to W-4 for a salaried employee. The form will include your personal info and your social security number. However, an important distinction between this and a W-4 is that this form does not ask you about withholding, meaning you won’t have taxes taken out of your paycheck at the time you receive it. Sadly, you’ll have to pay taxes on that income when you file your tax returns.

 

Invoicing

One key component of contract work is invoicing. Invoicing helps you keep track of the services you performed and the amount at which you perform them for. When completing a contract job, be sure to send invoices to your employer with the following details: – Your personal information – Services performed – Hourly rate, total hours worked, and total amount owed – Payment terms (how many days until payment is due) Not sure how to set up an invoice? There are millions of examples out there, check some tips out at the link below in the resources section and you’ll have enough to piece one together.

 

The 1099

When it comes time to filing your taxes, your employers will send 1099 tax forms to you for you to submit with your tax returns. You’ll get a separate 1099 for each contract job performed, and you’ll need to include all of them when submitting your returns.

We have a whooooole separate lesson on the 1099, so be sure to check that out to get answers to the rest of your questions.

 

Source(s): Intuit

Additional Resources

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