Hi everyone! I’m 17 and work remotely as a contractor. I’m super new to this, so sorry if I sound a bit lost. I’ve been trying to research how to pay my taxes, but I’m still pretty confused and worried I might’ve missed the deadline.
I started working in May 2024. I didn’t realize at first that being a contractor meant I’d be handling my own taxes. I’ve read about forms like the Schedule SE, but I’m stuck on terms like “net farm profit.” I think I might’ve missed the September 15th deadline for quarterly payments… does that mean I’m in trouble now? Also, once I fill out these forms, where do I send them?
I even tried setting up an IRS account, but it won’t let me because I’m not 18 yet. Any advice would be amazing!
You’ll want to make quarterly tax payments using a 1040-ES form. To know what to pay, you might want to get help from a tax preparer. Later, the SE form will get attached to your 1040.
Mal said:
You’ll want to make quarterly tax payments using a 1040-ES form. To know what to pay, you might want to get help from a tax preparer. Later, the SE form will get attached to your 1040.
Thank you! I got an estimate through ADP (that’s also where I get paid) on what I might owe in taxes, but I’m not sure how accurate it is. Do you think I should still get a tax preparer? Also, is it a big problem that I’m late?
@Sage
You might be able to figure it out yourself if it’s straightforward. Some tax software can help too, and you won’t have to spend much on a service.
Honestly, I don’t mean this in a bad way, but it sounds like you’re a bit lost here (understandable at 17!). It might be worth finding a CPA nearby and asking if they’d sit down with you for a quick explanation. If you’re near a college town, maybe ask a tax professor if they’d chat with you. Sometimes they’re happy to help.
Also, I noticed you mentioned filing as a “sole proprietor” on a W-2. The W-2 is for employees, but as a contractor, you’d get a 1099-NEC form instead.
What’s your total income for 2024? If it’s under $67,000 and you don’t have complicated deductions, you could visit a VITA site. They can help you file for free and explain the process. You could also check out Publication 17 for general info on filing, and Publication 334 for small business tax details.
Usually, you calculate net income using Schedule C, then figure out self-employment tax on Schedule SE. Self-employed people pay taxes quarterly since there’s no withholding. Since this is your first year, you might be able to just pay at year-end without penalties, but you’ll need to start paying quarterly next year.
@Toby
Thank you so much! That clears things up. My income is just below $7,000 now but should be closer to $9,000 by year-end. I’ve been saving 30% of each paycheck just in case, so I think I’m covered. Thanks again!
@Sage
Glad to help! Visiting a VITA site next year might still be useful, and they can help set you up for quarterly payments. With $9,000 income, you should only owe self-employment tax, around 15%, since you’re below the standard deduction.
>On my W-2 Form, I filed as a soul proprietor in section 3a.
You probably mean you filed a W-9 form and checked the box as a sole proprietor. You’ll get a 1099-NEC from your client next January. Then, you’ll use that and your records of income and expenses to fill out Schedule C for your tax return.
If you didn’t owe any tax in 2023, you’re not required to pay estimated taxes in 2024. Just make sure you save up to pay by April 2025. Next year, though, you’ll need to pay quarterly. To figure out how much, take the number on line 24 of your tax return and divide it by 4. Pay that amount every quarter.
Make sure to figure out if your parents or guardians can claim you as a dependent, especially if you’ve lived with them for most of the year. Check the box on your tax return if that’s the case.
For your return, you’ll need Form 1040, Schedule C, Schedule SE, and a few others. And no worries about “net farm profit” on Schedule SE, that part doesn’t apply to you!
@Joss
Thank you, this is super helpful! I’ve been saving 30% of my income just to be safe, but I was unsure about the timing. This cleared it up, thanks again!
You might try H&R Block. They charged me around $500 two years ago for a basic contractor filing. It wasn’t cheap, but the person I worked with knew her stuff. Try finding someone experienced there—it’s a bit less than a CPA firm.