IC and taxes - romiha Posted: Jul 8th, 2017 - 3:20 pm In Reply to: For one thing... - nn
First, I am NOT an accountant!
However, I make a deposit every month - outta sight outta mind.
I took a paystub from a previous job, noted how much was being withheld for Federal and State taxes. For SS/Medicare withheld I took that x2. Reason? The extra SS/Medicare is basically your "self-employment" tax. Maybe not REALLY (remember, I'm not an accountant) - but when you are an employee, your employer has to submit matching SS/Medicare to the IRS. So, being self employed, you get to pay that too.
I go online to the IRS site and make a payment - "estimated taxes".
Instead of paying quarterly (that's all that is required) I pay it monthly. As I said, "outta sight, outta mind." You have to keep track of what you've paid - you won't get a "receipt" from Uncle Sam. I am hopefully submitting more than I need and look forward to a refund come April 15, 2018.
The IRS website has more information for ICs
https://www.irs.gov/individuals/self-employed
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