Every employee is expected to pay their taxes every year. If you are a contract worker or a freelancer, you will also need to pay your taxes. For contract employees, the filing may be a bit different as there are certain forms that you need to fill out if you have a contract job. You can learn more about the filing of taxes and read on some questions that you may have on the official website of the IRS (Internal Revenue Service) at irs.gov.
Here is more information on how you can file contract work on your taxes:
- Forms. The first thing you have to do is to get the necessary forms that you need if you are on a temporary work or contract work. The forms that you will need are the 1900 form, the 1040-ES form and the 1120-W form. The 1900 form is used by the IRS to file and information return. This form is used in filing other kinds of income that you receive as a contract worker. The 1040-ES form is used by employees to file and estimated tax payment. This includes salaries from being self-employed or having a contract work. The 1120-W form is a worksheet used to determine a tax liability. These forms are used in different types of contract jobs that you may have.
- 1099 form. Before you engage in any contract work or termination contract, you have to fill out a form 1099 and submit it to your employer. The form is going to be used to know how much you earn from your contract work for the hours that you rendered for your contract work. You will get a copy of this form when you already need to pay your taxes.
- 1120-W form. You will use this form if you are working for a contract job in a corporation. The corporation that you are working for uses this to get an estimate tax liability. This form is used only for recording purposes and it is not a form to be filed to the IRS.
- 1040-ES form. This is the form you use if you are self-employed, if you work as a consultant or if you have contract work. You can file this with the IRS.
- Filing income tax return. When the time for paying your taxes comes, the forms that you filled out will become very handy. By referring to them, you can file your income tax return. It is important that you keep a copy of all the forms that have records of your income and your taxes. This may be useful for you in the future.
These are the steps that you have to go through if you want to file contract work on your taxes. If you need more information, you can always go to the website of the IRS and check on the frequently asked questions section to see if you can find the answers that you are looking for.