Receiving income as Contracted status
I have contracted with a company for services and am receiving an income. I need to find out my tax liability for this income. Does it become part of my other income and reported with my income taxes? Do I owe quarterly taxes on it? It is not my only source of income. I am over 72 years old.
Quick Answer:
Yes, your contract income is part of your overall income and must be reported on your income tax return. Since it's not your only source of income, whether you owe estimated quarterly taxes depends on your total projected tax liability for the year, including this contract income, and any tax withheld from other sources.
If your combined income and tax liability exceed the amount you expect to have withheld from other sources (such as W-2 income), you are generally required to pay estimated taxes quarterly to avoid penalties. Age 72 doesn't change this requirement. Use Form 1040-ES to estimate and pay quarterly taxes. Consult a tax professional or tax software for accurate calculations based on your specific financial situation.
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
