Independant Contractor Taxes

KevinJH7 · November 1st, 2009, 16:16

Just wondering if any independant contractor CFIs have a good way of figuring out how much they owe in taxes. I've been isntructing a few months now for a small school and it seems as though you're supposed to pay taxes quarterly.

Thanks for the help!

Maurus · November 1st, 2009, 17:15

I would assume they would get you a 1099 at the end of the year and then you would have to pay taxes then. Did you fill out a W9 when you started at the school?

Mike H · November 1st, 2009, 17:40

rule of thumb: at least 10% of your gross earnings for taxes, plus 15% for social security/medicare. Make quarterly deposits if at all possible. You still may end up owing some for imcome taxes, but it'll be better than having to come up with all the $$$ at once- nevermind penalties.

Sux, don't it?

Goldmember · November 1st, 2009, 19:35

I pay quarterly taxes based on a fairly reasonable estimate. Google "How to pay quarterly taxes" and the gov. website will give you the formula. Remember, if you don't pay quarterly taxes you will be responsible for your whole tax bill for the entire year at one time, which I've seen be upwards of $4000 if you aren't careful. Also, if you let you accrue a certain amount of taxes you may have to pay a penalty on those so it's best to go ahead and pay them if you are required to. IF you didn't have to file a return last year, you won't be penalized this year.

moxiepilot · November 1st, 2009, 21:39

the irs has it all laid out on their website, if you do a search for 1099. You can calculate your taxes from there it's about 15%

minitour · November 1st, 2009, 22:58

Hire a good accountant. Somehow mine has kept my quarterly tax liability this year (so far) to $0. I don't know how. I don't care. When it comes down to it, he pays the penalty and I pay the tax if he's wrong. You can't beat that.

Better yet, get a job waiting tables one night a week and take cash only for your "pilot services".

...no really don't. That would be bad and probably illegal.

-mini

Jbroz04 · November 1st, 2009, 23:16

Turbo Tax! Its like $80 bucks a year for the personal business one and it will keep track of how much you owe and when you should pay it!

mojo6911 · November 2nd, 2009, 11:48

I just used a copy of Quickbooks I had and took the penalty for paying yearly, because I am lazy.

Make sure you have part of your house designated as an office(it has to be used solely for business), that way, you can write off mileage to/from the airport, you can also take "potential clients" out to eat to get meal write offs. Also, any uniform expenses, business cards, recurrent training, training for new certificates that make you more "marketable", like CFII, MEI, Multi-Engine, etc... can be written off. You can expense your vehicle depreciation as well. Make sure you read the IRS guidelines or go see a qualified accountant to help you out.

Keep a tally of all of that stuff, and then I used TaxAct.com free edition and put my info in.

Mike H · November 2nd, 2009, 13:16

Quote:

Originally Posted by minitour

get a job waiting tables one night a week and take cash only for your "pilot services".

...no really don't. That would be bad and probably illegal.

-mini

If there is, a whole buttload of DPE's are gonna be in big trouble

KevinJH7 · November 2nd, 2009, 15:20

Thanks for all the replies!

minitour · November 3rd, 2009, 12:50

Quote:

Originally Posted by Mike H

If there is, a whole buttload of DPE's are gonna be in big trouble

You're only in trouble if you get caught.

-mini

November 1st, 2009, 16:16	#1
KevinJH7 Junior Member Join Date: Mar 2006 Location: TAN Posts: 87	Independant Contractor Taxes Just wondering if any independant contractor CFIs have a good way of figuring out how much they owe in taxes. I've been isntructing a few months now for a small school and it seems as though you're supposed to pay taxes quarterly. Thanks for the help!

November 1st, 2009, 17:15	#2
Maurus Old Skool Join Date: Jan 2007 Location: NE Ohio Posts: 1,605	Re: Independant Contractor Taxes I would assume they would get you a 1099 at the end of the year and then you would have to pay taxes then. Did you fill out a W9 when you started at the school? __________________ “I count him braver who overcomes his desires than him who conquers his enemies; for the hardest victory is over self.” - Aristotle

November 1st, 2009, 17:40	#3
Mike H Junior Member Join Date: Sep 2009 Location: Denver Posts: 242	Re: Independant Contractor Taxes rule of thumb: at least 10% of your gross earnings for taxes, plus 15% for social security/medicare. Make quarterly deposits if at all possible. You still may end up owing some for imcome taxes, but it'll be better than having to come up with all the $$$ at once- nevermind penalties. Sux, don't it? __________________ TT: 450 M-E: 35 C.A.S.E.L.& C.A.M.E.L, Instrument Airplane

November 1st, 2009, 19:35	#4
Goldmember Junior Member Join Date: Sep 2005 Location: Louisville, KY. Posts: 204	Re: Independant Contractor Taxes I pay quarterly taxes based on a fairly reasonable estimate. Google "How to pay quarterly taxes" and the gov. website will give you the formula. Remember, if you don't pay quarterly taxes you will be responsible for your whole tax bill for the entire year at one time, which I've seen be upwards of $4000 if you aren't careful. Also, if you let you accrue a certain amount of taxes you may have to pay a penalty on those so it's best to go ahead and pay them if you are required to. IF you didn't have to file a return last year, you won't be penalized this year. __________________ What are we going to do tonight brain? --Same thing we do every night Pinky, try and take over the world.

November 1st, 2009, 21:39	#5
moxiepilot Old Skool Join Date: Aug 2004 Location: CFI / CFII in PA Posts: 4,054	Re: Independant Contractor Taxes the irs has it all laid out on their website, if you do a search for 1099. You can calculate your taxes from there it's about 15% __________________ http://www.yinglingjewelry.com - help support a flight instructor Try? No, there is only do...or do not. There is no try.

November 1st, 2009, 22:58	#6
minitour Old Skool Join Date: Oct 2007 Location: . Posts: 4,233	Re: Independant Contractor Taxes Hire a good accountant. Somehow mine has kept my quarterly tax liability this year (so far) to $0. I don't know how. I don't care. When it comes down to it, he pays the penalty and I pay the tax if he's wrong. You can't beat that. Better yet, get a job waiting tables one night a week and take cash only for your "pilot services". ...no really don't. That would be bad and probably illegal. -mini __________________ McDonalds won't have me. AT&T Wireless won't acknowledge my resume. ...there has to be something out there for me. No, I'm not joking. Last edited by minitour; November 1st, 2009 at 22:59.

November 1st, 2009, 23:16	#7
Jbroz04 Senior Member Join Date: Dec 2008 Location: Vermilion Posts: 611	Re: Independant Contractor Taxes Turbo Tax! Its like $80 bucks a year for the personal business one and it will keep track of how much you owe and when you should pay it! __________________ The last thing every pilot does after a gear up landing is to move the gear selector to down.

November 2nd, 2009, 11:48	#8
mojo6911 Old Skool Join Date: Jan 2007 Location: GKY Posts: 3,388	Re: Independant Contractor Taxes I just used a copy of Quickbooks I had and took the penalty for paying yearly, because I am lazy. Make sure you have part of your house designated as an office(it has to be used solely for business), that way, you can write off mileage to/from the airport, you can also take "potential clients" out to eat to get meal write offs. Also, any uniform expenses, business cards, recurrent training, training for new certificates that make you more "marketable", like CFII, MEI, Multi-Engine, etc... can be written off. You can expense your vehicle depreciation as well. Make sure you read the IRS guidelines or go see a qualified accountant to help you out. Keep a tally of all of that stuff, and then I used TaxAct.com free edition and put my info in.

November 2nd, 2009, 15:20	#10
KevinJH7 Junior Member Join Date: Mar 2006 Location: TAN Posts: 87	Re: Independant Contractor Taxes Thanks for all the replies!

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