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JonnyCeltics's avatar

How can I address salary and taxes as a freelance teacher, writer?

Asked by JonnyCeltics (2716points) December 2nd, 2009

I have begun giving private English lessons to a student whose company is going to pay for his lessons.

They have recently sent me an “independent contractor” agreement, and I am looking for some advice.

I have agreed to a rate of $50/hr.

Do I need to charge them a percentage higher so that my taxes are taken care of at the end of the year? I am not familiar with this process. They mentioned that I would need to fill out a 1099 should I earn over a certain amount. I am confused.

What do I do?

Clearly, they need the documentation for their own business and will do not anything under the table….what implications does this have on my taxes, etc, and what should I do?
Thx Flutherers :)

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8 Answers

JLeslie's avatar

If you agreed to $50/hr, then that is what they will pay you period. You are responsible for all of the taxes associated with the money you earn. They are responsible for providing you with a 1099 by Jan 31 for the previous year, the same way you previously received a W-2 from an employer.

You will now have the responsibility of paying your taxes yourself, typically done quarterly, but also to pay full social security tax (when you work for someone as an employee you only pay half, and the employer pays half).

How much you make will influence how much you need to pay each quarter. You might want to talk to an accountant to at least estimate this for you, because if you unerpay by too much at the end of the year, you might owe a penalty.

JLeslie's avatar

Here is a link that might help you,,id=110413,00.html look down towards how to figure estimated tax to ensure you don’t underpay.

Also, if you travel you might be able to deduct the miles and a portion of your car expenses.

Zaku's avatar

I’ve done this. You will probably end up paying Federal (USA) business taxes which has a flat rate so it’s easy to calculate. Depending on what state you live in, you may need to fill out state tax forms as well. :-P

marinelife's avatar

It is complex. I suggest paying a bookkeeper or an accountant to keep track of your tax obligations, which may have to be paid quarterly depending on how much you make. You will have to file a Schedule C (profit and loss for your business) too.

JonnyCeltics's avatar

ugh – what a bitch!

JLeslie's avatar

@JonnyCeltics It won’t be very complicated, don’t get nervous. I was self employed for years and I just estimated how much I would make and paid quarterly. If I started making a lot more than I expected I paid more the next quarter.

If you are going to have this years taxes done by an accountant you can just ask one simple quesion by explaining how much you think you might make and he will estimate for you. There is a small you use when you submit your quarterly amount. Really it is not a big deal.

Zaku's avatar

Ya, the federal part actually isn’t that bad. Figuring out what deductions you can claim is the trickiest part.

Oh, and I have never found that whatever penalties I have sometimes had for not filling out taxes 4 times per year, was worth the effort of filing taxes quarterly. You can also avoid them small penalty by just guessing and sending in about enough money each quarter. I think (might be wrong) you get a free break on that the first year, anyway.

Strauss's avatar

A couple of years ago I got laid off my regular job and filled in with a 1099 job. It was only for a few weeks, and I just included it with my regular 1040 when I filed for that year’s taxes. Of course I had to pay tax, but I did not have to pay the social security. I had overpaid up to that time, so it just meant my refund was a little smaller that year. I got to use the money instead of letting Uncle Sam hold it for me.

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