I am an independent contractor. I sell travel services. How does this work with my taxes?

I am an independent contractor (not MLM!!) I sell a travel service to customers. I get a commission from my host agency. I have almost zero business expenses. How do I go about filing my taxes? I haven't got any commission yet but I want to figure this out before I do. If I don't like all the hoopla I will quit and stick to regular employment.

In short, I sell a cruise, I get 500.00 or so commission. I operate as an "independent agent of ....." I do not promote myself as any "business" name.

How do I file my taxes both state and federal? Do I have to do it quarterly?

Please Advice.

You will have to pay taxes as if you were working a normal job, plus the employers portion of social security/medicare. Since you are not having your taxes withheld, it will depend on how much you earn on when you make your tax deposits - quarterly or annually. You don't need a "business name" to be a business, so when you file your taxes, you will complete the section for being a business where you can deduct the costs involved in creating your income. Since you don't mention what state you are in, I can't help with that.

You are self-employed. You report your income and business expenses on Schedule C or C-EZ. If the net profit is more than $400 for the year you also attach Schedule SE to calculate the self-employment tax. SE taxes are levied at 15.3% of 92.35% of the net profit on the first $102,000 in 2008 and 2.9% on the excess.

If your tax liability for the year is expected to be over $1,000 (about $7,400 in profit will hit that) then you must make quarterly estimated tax payments using Form 1040-ES. Here's a link to the package: http://www.irs.gov/pub/irs-pdf/f1040es.pdf The instructions will help you in estimating your tax liability. Payments are due on 4/15, 6/15, 9/15 and 1/15 of the following year. You can skip the 1/15 payment if you file and pay any tax due by 1/31.

Those are the Federal rules. States with an income tax are similar as far as making estimated payments are concerned. Hit your State's DOR website for further guidance.

You may have expenses such as telephone, mailing (mail docs to clients), fees to host agency?, subscription to Travel and Leisure, Sabre fees?, bonding, website, brochures

Read about self employed tax filing and payment of estimated taxes: http://taxipay.blogspot.com/2008/04/tax-filing-by-self-employed-sole.html