http://www.SodowskyLaw.com As a 1099 contractor, you know that you owe income tax to the IRS and the Virginia Department of Taxation. Even though you might want to hold onto your money until the end of the year, the rules are that you pay estimated quarterly taxes. But how do you go about paying taxes on a quarterly basis?
Making estimated tax deposits to the IRS is actually very simple. By enrolling in an electronic payment program, you can make your payments online with a click of a button. The program, called the Electronic Federal Tax Payment System (EFTPS), can be found at EFTPS.gov. After enrolling, the IRS will send you a personal identification number in the mail that will allow you to complete the enrollment process. You will then be able to connect your bank account to the website, which will allow you to push your payment out of your account when it is due. It is important to note that with this system, you are in control and the IRS cannot take money from your account. The benefit of this system is that you can set your payments up in advance, and you can pay your estimated taxes quarterly, monthly, or biweekly.
For answers to your questions about tax issues, contact our Fairfax office at 703.476.1176 to schedule your confidential consultation with a tax attorney.