Contract Jobs - 1099 Form. Taxes on projects?

[jasonchan]

I need some financial advice from experienced web designers. I am fairly new in this career and I am currently working part-time for this web developer and he is paying me X number of dollars per hour.

However, this is a contract job meaning that I would need to file my own taxes later. So for every project or hours I have spent, I would need to send out an invoice. My question is, is tax to be applied for these hrs?

say the project was 25 hrs, $15/hr... would i charge him $375 or 375 plus the state tax?

[balou]

I think each state is going to have different rules here. Check with your state small business admin. They probably have a helpline for asking tax questions. I would strongly suggest talking to an accountant.

[Ned]

Do you have a business license? You can't charge tax if you're not registered to. The tax doesn't go to you, it goes to the government. If the government doesn't know about it, then you're breaking the law to charge it! The government knows about it by you filing first for a business license, then for a tax registration number.

Talk to an accountant first. They'll tell you if you actually need these things or not. As you are working sub-contract, and probably not to any large amount, my guess is that you won't.

[PrintDriver]

I think the large amount is only somewhere around $200 before old Unky Sam wants his cut. But check on that with an accountant. State rules vary. A lot of times a freelancer pays taxes quarterly to avoid the fine for a hefty end-of-year payment. If you owe too much they fine you more for not paying sooner. Go figure.

[chris_bcn]

Don't charge your clients tax - that'll get you into a load of trouble unless you have your company set up correctly.

Are you set up as a sole prop, with your fictitious business name set up et.

Basically you should set up a business account and make sure 30% of your invoice stay in there for the tax man.

[Chimera]

I've never charged tax on a project. If you make more then $600 from a project then your client/employer is required to fill out some type of tax form. That's it, as far as I know. Oh, and you don't have to file taxes if you earn less then $400 from your business in a given year. Also, I'm fairly sure you don't pay estimated taxes unless you owe Uncle Sam a thousand dollars in taxes.

http://www.irs.gov/individuals/index.html

http://www.allfreelance.com/taxes.html

[jasonchan]

Don't charge your clients tax - that'll get you into a load of trouble unless you have your company set up correctly.

Are you set up as a sole prop, with your fictitious business name set up et.

Basically you should set up a business account and make sure 30% of your invoice stay in there for the tax man.

well yea the person is not a client and im not tryin to set up a business. I guess I should rephrase what I wrote earlier.

Basically I am providing help for this web designer by building websites, doing minor maitenance, and other matters for HIS clients. And he is going to pay me by the hour and simply hire me as a contractor.

So based on what I hear, I should not add taxes to the amount and save up at least 30% of what I earn to pay for taxes a year from now?

[Jimeda Fork]

So based on what I hear, I should not add taxes to the amount and save up at least 30% of what I earn to pay for taxes a year from now?

Bingo.

[jasonchan]

alrighty ... thanks a lot for your input and feedback guys!