Ask HN: Freelancers/Contractors, how do you deal with taxes?

2 points by SheepSlapper ↗ HN
I'm about to start a large 1099 gig full time, and I'm trying to wrap my head around all the various tax implications. I know that as a 1099 contractor, I'm responsible for ALL the Social Security and Medicare taxes that my employer would usually split with me if I were a traditional W2 employee, along with the full burden of the Federal Income tax. Easy peasy, right?

My question is: What is the best way to go about this so I can keep the most amount of my money as possible, and not run into any surprises come tax time?

I know that there may be benefits to forming an LLC or S-Corp, but I'm not exactly sure which (if either) would be for me. Anyone have experiences with one/both that they can share? I've read that there are some great tax benefits to running an S-Corp, in terms of paying myself a wage through the company and then paying dividends on any profits it makes (which is taxed to a lesser extent). Are there any caveats or gotchas that I should know about?

Any other tips about saving for tax time? How much? How often should I (or how often am I required to) pay taxes as someone who's self employed? I've heard that some people pay quarterly, while others don't. How about recommendations for a tool that'll help track business expenses/deductions?

Any and all helpful advice is welcome. Or tax horror stories, cautionary tales, anecdotes, etc :)

And I'll end this by saying that obviously I'm going to talk to a tax professional about this all very soon, but I wanted to see what the community has to say about it as well.

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