I am getting my first paycheck as an independent contractor.What should I do about fed income tax withholding?

I am in Calfornia and am working in a Calif. company. I ask because I am not considered an employee of that co., but am an independent contractor (e.g. doing free lance work). Since I am not an employee, the employer will issue me a check without withholding anything for state or fed income tax. What kind of withholding do I need to do for fed. income tax? Which form(s) should I use? Thanks.

Public Comments

1. Not only will you have to pay your own federal and state withholding, you will have to pay your own social security and medicare taxes. You will have to make quarterly payments to the IRS and the state of California. Also as an employee, you pay half of your social security and medicare tax and your employer pays the other half. Being self-employed, you pay both halves. You also then get to deduct your expenses in doing your job. Your tax preparer should go over what is allowed. In total expect to save around 30% of your pay for all of the taxes.
2. The federal form for your quarterly estimated payments is 1040ES. The amount you'll owe for income tax depends on how much you make for the year and your filing status. In addition to income tax you'll owe self-employment tax, for social security and medicare - that comes out to around 14.1% of your net income. You'll also need to make estimated payments to CA.
3. You are self employed or independent contractor. You will report your income and expenses on schedule C or C-EZ (Form 1040). This income is subject to SE tax at 15.3%. Read: http://taxipay.blogspot.com/2008/04/tax-filing-by-self-employed-sole.html