how does independent contractor pay taxes
Self-Employment Tax. Self-Employment (SE) Tax makes up for not having an employer to withhold Social Security and Medicare from your paycheck. Any year your net earnings -- your independent-contractor income, less your business expenses -- top $400, you have to pay SE Tax, which is 13.3 percent as of 2012. That requires filing Schedule SE and Schedule C for your business income as well as a 1040.