In your case, you appear to be correctly classified as a contractor, but it's odd that you are billing by the hour and putting in quite a few hours.
You need to track all the money you get--ask for checks not cash and then photocopy them before you cash them. Think about it, you don't want to think you made $2000 and have them give you a 1099-Misc for $3000. (Even if you don't get the 1099-Misc, you have to report the income.) If you don't get reimbursed for expenses, their total and yours should match.
At any rate, as far as putting money aside, you definitely owe SE tax and that's 13.3% of the total. If your income for the year is more than $5800, you will also owe income tax. It doesn't look like you will hit that number.
As for quarterly payments, if you owe more than $1000 (unlikely for this year), then you are supposed to send money in quarterly. See form 1040-ES.
Edit: Then get a receipt book (or create your own) and whenever he pays you, make a point of filling it out and giving him a copy for his records. You should give him a summary of what he's paid you.
· 8 years ago