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Q: Tax software for consultant ( No Answer,   3 Comments )
Subject: Tax software for consultant
Category: Business and Money > Accounting
Asked by: geneth-ga
List Price: $10.00
Posted: 26 Jul 2006 09:59 PDT
Expires: 25 Aug 2006 09:59 PDT
Question ID: 749750
I live in California and work for a company here as a consultant (not
incorporated, just a consultant). I submit an invoice to the company
semi-monthly and the company then pays me semi-monthly.

I am wondering:

1) how often do I have to file federal and state tax deductions?

2) what about the $90k income cap on social security deductions? I
worked for another company as a full time employee before this gig,
and already pay SS tax on a large portion of the $90k, how do I make
it "count" or will I have to deduct SS tax until the end of the year
and hope to get a refund?

3) are there softwares that I can use to do this myself as an
individual not a small business?

There is no answer at this time.

Subject: Re: Tax software for consultant
From: abezon-ga on 26 Jul 2006 15:24 PDT
1. You'll need to file quarterly tax payments, but only file the tax
return in April.

2. You will fill out the long version of Schedule SE to determine your
self employment taxes. Any wages will be deducted from the $90,000
maximum social security wages before you figure your social security
taxes on the SE profit. You will pay medicare taxes on all SE income,
even if your earned income exceeds $90,000.

The social security rate is 12.4% of net SE income (to a max of $90k
earned income). The medicare tax is 2.9% of net profit.

3. Just about any 2005 tax prep software will include a tax planning
section to help you figure your 2006 estimated tax payments. Check on
eBay for copies. You could also go to a local tax prep firm -- most
will give you a free consult to help you figure what you should be
paying for the rest of 2006.

You might want to take a tax prep class so you know what kind of
expenses to track & how to figure your taxes.
Subject: Re: Tax software for consultant
From: geneth-ga on 26 Jul 2006 15:53 PDT
Thank you so much!

What is the Schedule SE form? Where can I download it? Can I do the
quarterly tax payments online?
Subject: Re: Tax software for consultant
From: abezon-ga on 26 Jul 2006 22:22 PDT
Yes, but it takes a while to get the electronic payment system (EFTPS)
set up. The next quarterly payment is due 9/15, so you have time.

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