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Independent contractor expenses4/24/2023 ![]() The employee is subject to the employer's control regarding what will be done AND how it will be done. Definition of an employee - An employee performs services for the employer.If you don't know whether you are an employee or an independent contractor, it would be a good idea to find out. You will need to deduct them on your Schedule C.Īs you can see, your classification as an employee or independent contractor can have a big impact on you. You will need to keep careful track of all your business expenses.Whether they have to send you a 1099 is based upon how much money they paid you. Some businesses will be required to send you a 1099-Misc and some won't. You will need to keep careful track of all income.You may need to mail in estimated quarterly payments of income, Social Security and Medicare tax.Taxes are not withheld from the payment sent to you by the business(es) you work with.This equals roughly 15% of your income after business expenses are deducted. You pay all of the Social Security and Medicare taxes on your earnings.Your employer should provide you with a W-2 by January 31st of each year.Your employer is required to provide you with a W-2 that shows the income you were paid and the taxes that were withheld from your checks.Your employer should withhold income taxes, and your share of Social Security and Medicare tax, also known as FICA.If you lose your job you may be eligible for benefits. Your employer must pay unemployment taxes (FUTA) for you.Your employer must pay ½ of your Social Security and Medicare taxes.
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