One of the challenges of being an independent contractor is that you have to manage your own taxes throughout the year. Unlike with a full-time job, nobody is withholding money from your paychecks. In addition, you have to fill out extra forms that are specifically geared toward self-employed individuals. Below are articles, forms and publications from the IRS, which can help independent contractors manage their taxes.
Note: You will need Adobe Acrobat to view the forms and publications in PDF format. You can download Acrobat by clicking on the link below.
Form SS-4 - Application for an Employer Identification Number
Use Form SS-4 to apply for an Employer Identification Number (EIN), a nine-digit number assigned to sole proprietors, corporations, partnerships, estates, trusts, and other entities for filing and reporting purposes.
Form SS-8
Use Form SS-8 to determine an employee's work status for the purposes of federal employment taxes and income tax withholding.
Form W-2 - Wage and Tax Statement
Employers must file Form W-2 for each employee from whom income, social security, or Medicare taxes have been withheld. You must also file the form for each employee from whom income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4.
Form 940 - Employer's Annual Federal Unemployment (FUTA) Tax Return
Used by employers to declare federal unemployment taxes payable.
Form 940 EZ - Employer's Annual Federal Unemployment (FUTA) Tax Return
Used by employers to declare federal unemployment taxes payable.
Form 1040 - U.S. Individual Income Tax Return
You must use Form 1040 if your taxable income is $50,000 or more. Use Form 1040 to report all types of income, including those you cannot put on either Form 1040A or Form 1040EZ.
Form 1040A - U.S. Individual Income Tax Return
This form can be used only if you meet certain requirements, including a taxable income under $50,000. If you do not meet these requirements, you must use form 1040.
Form 1040-EZ - U.S. Individual Income Tax Return
This form can be used only if you meet certain requirements, including a taxable income under $50,000. If you do not meet these requirements, you must use form 1040A or Form 1040.
Form 1040-ES - Estimated Tax for Individuals
Use this form to figure and pay your estimated tax. Estimated tax is the method used to pay tax on income that is not subject to withholding; for example, earnings from self-employment, interest, dividends, rents, alimony, unemployment compensation, etc.
Schedule A - Itemized Deductions
Use this schedule with Form 1040 to itemize your deductions.
Schedule C or Schedule C-EZ - Profit or Loss from Business
Use Schedule C or Schedule C-EZ to report profit or loss subject to self-employment tax from a business you operated or a profession you practiced as a sole proprietor, and to report wages and expenses you had as a statutory employee.
Schedule E - Supplemental Income and Loss
Use Schedule E to report income or loss from rental real estate, royalties, partnerships, estates, trusts, S corporations, and REMICs (residual interests).
Schedule SE - Self-Employment Tax
Use this schedule to figure self-employment tax.
Form 1120 or Form 1120A - U.S. Corporation Income Tax Return
Use Form 1120, U.S. Corporation Income Tax Return, and Form 1120-A, U.S. Corporation Short-Form Income Tax Return, to report the income, gains, losses, deductions, credits, and to figure the income tax liability of a corporation.
Form 1120S - U.S. Income Tax Return for an S Corporation
Form 1120S is used to report the income, deductions, gains, losses, etc., of a domestic corporation that has elected to be an S corporation by filing Form 2553, Election by a Small Business Corporation, and whose election is in effect for the tax year.
Form 2106 - Employee Business Expenses
Use Form 2106 if you are an employee deducting expenses for your job. Employees who use the standard mileage rate (if claiming vehicle expense) and are not reimbursed by their employers for any expense may be able to file Form 2106-EZ, Unreimbursed Employee Business Expenses. See Form 2106-EZ to find out if you qualify to file it.
Form 2106-EZ - Unreimbursed Employee Business Expenses
You may use this form only if you are an employee deducting expenses attributable to your job.
Form 2210 - Underpayment of Estimated Tax by Individuals, Estates and Trusts
Use Form 2210 to see if you owe a penalty for underpaying your estimated tax and, if you do, to figure the amount of the penalty.
Form 3903 - General Moving Expenses
Use Form 3903 to figure your moving expense deduction if you moved to a new principal place of work (workplace) within the United States or its possessions. If you qualify to deduct expenses for more than one move, use a separate Form 3903 for each move.
Form 4562 - Depreciation and Amortization
Use Form 4562 to claim your deduction for depreciation and amortization; to make the election to expense certain tangible property; and to provide information on the business/investment use of automobiles and other listed property.
Form 4797 - Sales of Business Property
Use Form 4797 to report the sale or exchange of property used in your trade or business.
Form 8300 - Report of Cash Payments Over $10,000 Received in a Trade or Business
Each person engaged in a trade or business who, during that trade or business, receives more than $10,000 in cash in one transaction or two or more related transactions, must file Form 8300.
Form 8582 - Passive Activity Loss Limitations
Form 8582 is used by noncorporate taxpayers to figure the amount of any passive activity loss for the current tax year and the total losses allowed from passive activities.
Form 8829 - Expenses for Business Use of Your Home
Use Form 8829 to figure the allowable expenses for business use of your home on Schedule C (Form 1040). If all of the expenses for business use of your home are properly allocable to inventory costs, do not complete Form 8829.
Publication 15 - Employer's Tax Guide (Circular E)
This guide explains your tax responsibilities as an employer. It explains the requirements for withholding, depositing, reporting, and paying taxes. It explains the forms you must give your employees, those your employees must give you, and those you must send to the IRS and SSA.
Publication 334 - Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)
This publication is for small business owners who complete Schedule C or C-EZ of Form 1040. The purpose of this publication is to provide general information about the federal tax laws that apply to sole proprietors and to statutory employees.
Publication 533 - Self-Employment Tax
This publication explains what income is subject to self-employment tax (SE tax) and how to figure the amount of SE tax.
Publication 535 - Business Expenses
This publication discusses common business expenses and explains what is and is not deductible.
Publication 560 - Retirement Plans for the Self-Employed
This publication discusses retirement plans that can be used by self-employed persons and partnerships. These plans are called Simplified Employee Pension (SEP) plans and H.R. 10 (Keogh) plans
Publication 583 - Starting a Business and Keeping Records
This publication provides basic federal tax information for people who are starting a business. It also provides information on keeping records and illustrates a record-keeping system.
Publication 587 - Business Use of Your Home (Including Use by Day-Care Providers)
This publication explains the rules for taking the deduction for business use of your home and how to figure the limit. If you are an employee or file Schedule F, the worksheet at the end of this publication will help you figure the limit on the amount you can deduct.
Publication 911 - Direct Sellers
This publication provides general tax information for direct sellers. It discusses the tax treatment of income, expenses, and other items related to your direct selling business.
