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What's The Beast Way to do Payroll Taxes For Independent Contractors?

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    I'm an independent contractor and it took me a little while to get used to not having payroll taxes deducted before I received my paychecks. I actually get all of the money I earned and then am responsible for setting aside the percentage that I owe for various state and federal taxes. I have no problem with paying what I owe for taxes, but it does seem like there can be a better way for the IRS to withhold taxes from individuals who are independent contracts.

    What I wound up doing is opening a separate bank account to hold the money I set aside for taxes, but I wouldn't mind if there was an even easier way to just have them automatically taken out of my paycheck. I always found it odd that the vast majority of people who work automatically have their taxes taken out of their checks, but private contractors do not.

    What do you think? Should we keep the same payroll tax system we currently have for private contractors or should we figure out a way to streamline the process for them in the same way we do for the majority of other workers?
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    As an independent contractor myself, I feel your pain. But ultimately, I get why the system does it this way. As you have already experienced, contractors do itemized deductions on all sorts of things, where most folks with a regular w2 really do not. Which in turn makes the process even that much more of a hassle. But you do get the opportunity to write off a sum total that many a time is worth more than standard deductions, if you take advantage of all the possible deductions. So, it can be a good thing.

    I'm particularly not a fan of having to file and guestimate my taxes every quarter though. Even though I routinely get penalized, I always wait until the end of the year and just file the one time. The penalities are minimal, and it saves me from constantly thinking about tax season all year round.
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    J.K.Logic Wrote: I'm particularly not a fan of having to file and guestimate my taxes every quarter though. Even though I routinely get penalized, I always wait until the end of the year and just file the one time. The penalities are minimal, and it saves me from constantly thinking about tax season all year round.
    I do the same thing. Even though I set aside the money, it's just easier to take care of it all at once.

    Thankfully I have a good friend who is a tax accountant, so he helps make my life much easier. He always gives me a hard time for not paying quarterly, but he does understand why I find it more of a hassle than just paying everything at once.