Today TaxMama® hears from Idlkotr in the TaxQuips Forum, with a good question. “I have the opportunity to be an independent contractor. I am an occupational therapist who will be working with disabled children in their home. Thus, a lot of driving. I will be doubling my income. I do not have a clue how to be an independent contractor and not go to jail for income tax fraud.”
Congratulations. That sounds like a wonderful opportunity.
In the TaxQuips Forum you will find more detail. For this brief TaxQuip, I have outlined my reply:
Make sure you have business licenses for all the towns where you will be working.
Meanwhile, read IRS Publication 334 thoroughly. It’s a free tax guide for small businesses.
Get a bookkeeping program, to track your income and expenses – especially the out of pocket, cash expenses. It wouldn’t hurt to get a scanner, for your receipts.
Now, you have the ways to track things. If you want to know how to minimize your taxes, too, read Small Business Taxes Made Easy. It will include information the IRS will never tell you.
One last thing. If you’re driving a lot, get a AAA membership. If you have any problems, just give them a call and they’ll get you home.
And remember, you can find answers to all kinds of questions about running a business and other tax and business issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
Please post all Comments and Replies in the new TaxQuips Forum .