pam.bouncer[at]gmail.com wrote:

- quote -

They're not exactly separate. You file one Form 1040. You
figure your net income as a Sole Prop. on Schedule C (maybe
Schedule C-EZ), self-employment tax on Schedule SE, and
transfer these to Form 1040.

Keep particularly close track of expenses that relate to
your Sole Prop. income. These are especially valuable,
because they come off your Sole Prop. income and so reduce
both income tax and self-employment tax. They go on Schedule
C.

Estimated tax for fourth quarter 2004 is due January 18. So
it would be a good idea to figure your taxes now, on the
best information you have, and see if you come up owing
enough tax to be subject to the penalty. (See the
instructions for Form 2210 for this.) If you don't owe, or
don't owe enough to be hit with the penalty, don't worry
about it for this year, just file your taxes on time.

If you're going to have Sole Prop. income in 2005, you need
to determine whether you'll need to make estimated tax
payments in 2005. If you also have W-2 income, you may find
it more convenient to adjust your withholding instead so
that you don't need to pay estimated tax.

--
Chris Green

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In the past when employed by a corporation I have just
collected all my W2's and either filed the 1040 myself or
stopped into H&R those years I was feeling lazy.

I just recently took a contracting gig this past November
and received a few paychecks in 2004 acting as a Sole
Proprietor. I have done some research and realize I need to
file IRS Form 1040-ES quarterly to handle this income.

I am wondering if I should handle my W2 income and my
contracting filings totally separate, or if there is any
overlap in the two. It would seem logical that each should
be handled separately and one filing knows nothing about any
incomes from the other filing. Is this correct?

Also, I am considering using one of the Taxcut/Turbotax
packages for the first time, are these just for my annual W2
earnings or should I use those for my quarterly filings as
well? I am not claiming any expenses or anything special,
except for a vehicle donation and some other charitable
donations. I assume either of those packages will be able
to walk me through the itemization process so I can get the
appropriate credits, are there any other recommended
packages?

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