How will part-time contract work affect me when filing taxes at the end of the year?
I currently work full-time (with benefits) in a community agency setting as a mental health therapist. I am seriously considering part-time contract work with a private practice (that is labeled as Inc.) for extra $ and to explore future career options outside an agency setting. Likely, I will not be working more than 5 hours per week at a ballpark figure of $30/hr. How will this affect my taxes when it is time to file? What should I expect to pay in taxes for this? What things can I claim on my taxes (planning to get another line on my cellphone just for this position)? I will be filing jointly with my husband who is a full-time employee at his job. I am worried that this may end up costing more than it is worth. Any suggestions or thoughts?
- Tax LadyLv 41 decade agoFavorite Answer
Assuming that you will be paid as an "independent contractor" and not an employee, you will have to file Schedule C Self-Employment Income with your joint return. This is not a big deal, and could be very beneficial in terms of your taxes.
Keep good records of all of your expenses, and don't assume that anything is not deductible. However, you should have a tax pro prepare your return. There are many rules regarding Schedule C income and many potential deductions. But there are pitfalls, too. I'd say that an additional $7200 is definitely worth the minor effort of filing a Schedule C.Source(s): www.irs.gov
- JudyLv 71 decade ago
You'd pay self-employment tax which would be a little over 14%, plus income tax for federal, and state and local if applicable, at whatever your rate is.