2006 Irs Rate Tax Questions ?
Q.I do computer consulting work, will that mean the tax need to be paid at 35% rate or the standard 15%. I really do not know how IRS will know if I am Personal service co. My occpuation code is general services on tax form. Does anyone can give me some details about 2006 Irs Rate Tax ? Thanks for advance
A.It sounds like you are working as an independent contractor. You report your income and expenses on Schedule C of Form 1040. The net income from Schedule C goes to line 12 of the 1040, where it becomes part of your gross income. The rate of tax will depend on your total tax and deductions. The net income from Schedule C also goes to Schedule SE, where you compute self-employment tax, a tax in addition to your income tax. That is a fixed rate of a little less than 16%, and it winds up on line 58 of your 1040. It sounds like you are unfamiliar with taxes and that English is not your native tongue. I think it would be a good idea for you to consult an accountant about your allowable business deductions and also your quarterly payment responsibilities if you are going to be an independent contractor. It does not matter. Your tax and income situation is what dictates the rate you'll pay. You could be an lawyer, doctor, computer consultant, or whatever, but the tax law would not change. See an accountant, as Phil suggested. it is a simple question, and your as bright as you say you are , and your command of the language is suppirior to most and The IRS is at your disposal.
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