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Paying Taxes on a Consulting Position
I've just started as a new independent consultant and am currently on my first assignment for a client. I have been receiving payments each week for my work, but am unsure what forms I must fill out with the IRS to pay the appropriate taxes on this income. Can anyone please provide information as to what I need to do?
Thanks in advance for any assistance you can provide.
You are likely going to get a 1099 form from the client at the end of the year that will include your fees for the year. You may need to make quarterly estimated income tax payments since a 1099 does not have any income tax withheld. I record my consulting fees and expenses on Schedule C of the federal tax return. Hope that helps.
In addition to the other responses you've received, you will need to estimate your taxes and send to the IRS periodically. If taxes are underestimated, a penalty may be assessed at year end filing.