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I started working as an independent contractor for a software company last August. It is steady work and I get regular paychecks but I have to save and pay all the taxes myself.

I'm not very knowledgeable with taxes and I'm trying to learn as much as possible. I have a couple of questions and hope that some of you can help me.

1) What should I do file my taxes for last year? Let a tax professional do it or buy TurboTax or Taxcut. I'm a dot-it-myselfer but I'm concerned about not maximizing my deductions. If you recommend doing it with tax software, which one of the many versions of TurboTax (for example) should I get?


I would suggest seeing a professional this year. It's not that you can't do it yourself, it's just that it's easier to learn what you need to know quickly from someone who has lots of experience dealing with self-employed clients. If your situation is pretty straightforward, you can do it yourself next year. You can use any of the levels of any of the consumer software packages to prepare your return. The more expensive versions will have more extensive help sections, but I don't believe they're worth the money. I'd sooner spend a few dollars more and get a live person (your tax professional) to answer my questions.

2) I just realized that I need to make quarterly tax payments to the IRS. How do i set this up so I can send them money?

You send a check with Form 1040-ES roughly quarterly (by 4/15, 6/15, 9/15 and 1/15). There are programs out there which will calculate the minimum payment required for each period (search for 2210 annualized income calculator).

Ira
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