Bill, Steve, and John:

THANK YOU all for taking the time to respond.
Could one of you please clarify the mileage deduction for me?

a. I usually sit at home in the morning waiting for a phone
call telling me where to go to pick up whatever it is I'm to
pickup and deliver, and I leave from here -- home -- and go
to the first pickup [which, by the way, can be a hundred
miles away]. Subsequently throughout the day I get cell
phone calls about other pickups and deliveries. At the end
of the day -- after the last drop off -- I drive home. How
do I figure my commute mileage?

b. SOME days, I get the first call in the morning, and it is
to go to the office of the guy from whom I get assignments
to pick up a package to be delivered, and start out from
THERE.

How do I figure my commute mileage in both circumstances?

THANK you all, VERY much for the help.

Harry Truman

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- quote -

If you anticipate owing less than $1,000 this year, you need
not make estimated payments.

Generally, you need to make estimated tax payments of 100%
of your prior year liability (112% if your AGI is > $150,000
I believe) or 90% of your current year liability.

States follow similar safe harbor rules. However, the
threshholds for making estimated payments are different from
state to state. For example, in PA, you need to make
estimated payments if you have over $8,000 of income that
does not have PA withholdings taken out.

Thanks for the post. You just made me realize that I forgot
to make my 3rd quarter PA estimated payment.

Josh

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Harry <harrytruman[at]yahoo.com> wrote:

- quote -

Estimated taxed for the fourth period (Sep 1 through Dec 31)
are due January 15. Alternatively, if you file your 1040
and pay your taxes by then, you don't have to separately
send in the estimated payment.

Failing that, if you wait until April to pay your taxes you
might end up paying a penalty.

Steve

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harrytruman[at]yahoo.com (Harry) posted:

- quote -

Depending on your _total income_ for the year 2005, and how
much was withheld at your former job, it's unlikely you'll
have to worry about making an estimated payment. Certainly
you won't, if you truly drop the "contract" before the end
of September.

But be alert, as an "independent contractor," you are liable
for Social Security and Medicare payments equal to 15.3% of
your total _net_ income (i.e. "profit"). But you'll also be
entitled to deduct your expenses -- which, if you're using
your own car, can be assessed [at] 48.5 cents per mile (for the
last 4 months of 2005).

However, in order to do this, you should keep a diary of
your daily trips, mileage, etc. When you finally file your
2005 return next year, you'll need to include a Schedule C
(or C-EZ) and compute the SS and Medicare on Schedule SE.

If you keep at it, you'll undoubtedly receive a 1099-MISC
from the company who "hired" you. If that's the case, keep
that diary. And you may want to have some help preparing
your return. [However, if you really quit soon, and your net
income is less than $400, self-employment taxes won't be
due.]

Bill

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Desperately in need of a job, I took one of these
"Independent Contractor" delivery things {"You can make
between $400 and $600 a week."}. I've been doing this since
the 7th of this month, and I might quit before the end of
THIS month -- putting 150 to 240 miles per day on the
odometer is just too hard on my car.

SO...do I have to file a quarterly estimate if I've only
been an "independent contractor" for between 12 and 17 days
total, and won't/might-not-be-doing-it next quarter? [ is it
"estimate" or "return"?: I havent' had much time to research
all this: sorry ].

Harry Truman

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >