Tax reporting for independent contractor income
As an independent contractor for Abe & Murray’s Tax Service, I earned $6,000 during My work from 1/15 through 4/30.
Regarding my income, please discuss the following items:
What type of income is this?
What expenses, if any, could be deducted from the income?
What form is used to report income to me and the IRS?
What schedule will I fill out to report this to the IRS?
What will be my anticipated tax rate?
Is it better to be paid as an independent contractor or on-staff at a company?
The problem poses the reporting issues for an independent contractor as opposed to being classified as an employee. The solution explains how the income is treated on a tax return, which forms are included, what expenses are possible deductions plus the discussion about the labor law in such situations.
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