Filling Out The Proper Forms

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  Form 1099-MISC has all the information about your taxable income.coins in form of dollar sign image by Melking from Fotolia.com
  
  Obtain a copy of Form 1099-MISC from the company or companies with which you are contracted to work. This is the self-employed person's W-2 equivalent and has all of your earned income information. You should automatically receive a 1099-MISC from the company by January 31 of each year. If you do not receive it, contact the company and request one.
  
  
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  Form 1040 is the most common income tax filing form for individuals.tax forms image by Chad McDermott from Fotolia.com
  
  Fill out Form 1040 or 1040-EZ just as you would if you were filing with W-2s. Fill in all your identification information (name, address, Social Security number) and wage information from the 1099-MISC forms. If you received pay from multiple companies, you will have multiple 1099-MISC forms. Total all the income from all forms. If you use tax preparation software, the program will add it all up for you.
  
  
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  Schedule C of Form 1040 and its instructions can be found on the IRS website.typing image by Dariusz Urbanczyk from Fotolia.com
  
  Fill in all required information in Schedule C of the 1040 or 1040-EZ form. This section covers self-employed income and is required for independent contractors.
  
  
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  You are required to pay self-employment taxes as an independent contractor.stack of cash image by jimcox40 from Fotolia.com
  
  Complete Schedule SE of Form 1040. This form is for your self-employment tax and is required for anyone with self-employed income.
  
  
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  Many choose to send their tax return in the mail.air mail image by charles taylor from Fotolia.com
  
  Choose your filing method. If you prefer to mail in your return, print your completed forms and send them with any required tax payment. You can find the address to mail your return to on the IRS website. You may also e-file free of charge if your income is less than $57,000 for the year. The IRS website provides a link to the Free File program. To e-file, request a PIN through the provided link by typing in your Social Security number and adjusted gross income (AGI) from last year's return. You will receive your PIN via email. Your PIN will allow you to track your return once you have e-filed. E-filing will help you get your taxes processed faster and prevent your return from being lost in the mail. If you use tax preparation software, the program will include all the necessary schedules.
  
  
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  Each state has different requirements for self-employed tax filing.Carte Etats Unis Noir image by Aimohy from Fotolia.com
  
  File your state tax return. If you are using tax preparation software, you will be able to do this once you have completed your federal return using the same information. If you are not filing through tax preparation software, check with your state's Tax Commission website to see which forms you need to file. You should not have to fill out extra forms if you are a full-time resident of your state, but it is important to verify this with your individual state to avoid incurring penalties.
  
  

Payment of Your Taxes

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  The IRS offers payment plans when you owe a substantial amount of taxes.payment image by Valentin Mosichev from Fotolia.com
  
  If all of your income was paid to you as an independent contractor, you will likely owe taxes to the IRS. If you estimate at the beginning of the year that you will owe more than $1,000 in taxes, the IRS requires that you set up an advanced quarterly payment plan. If you do not do this, you may incur penalties and have to pay extra when you file.
  
  
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  Setting up a payment plan helps you to avoid penalties when you cannot pay a lump sum of taxes.piggy bank image by William Burnett from Fotolia.com
  
  If you are unable to pay all of your owed taxes up front, you can request to set up a payment plan through the IRS website. On the IRS homepage, click the "Online Payment Agreement (OPA) Application" link and fill out the form to request a payment plan online. You can also call the IRS to set up a payment plan over the phone at 800-829-1040. Set up your payment plan as soon as you file to avoid extra fees and penalties.
  
  
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  Most states will allow you to set up a payment plan for owed taxes.keyboard image by Fyerne from Fotolia.com
  
  If you also owe taxes to your state, check with your state tax commission to see if you are eligible for a payment plan for state taxes. You can do this through your state's Tax Commission website or over the phone.