{"id":2205,"date":"2018-10-19T09:08:14","date_gmt":"2018-10-19T17:08:14","guid":{"rendered":"http:\/\/blog.huddlestontaxcpas.com\/?p=2205"},"modified":"2020-03-05T17:39:33","modified_gmt":"2020-03-06T00:39:33","slug":"do-self-employers-have-to-pay-quarterly-taxes","status":"publish","type":"post","link":"https:\/\/huddlestontaxcpas.com\/blog\/do-self-employers-have-to-pay-quarterly-taxes\/","title":{"rendered":"Do Self Employers Have To Pay Quarterly Taxes?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Usually, yes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are a handful of circumstances where you may not need to. Before going too deeply into this, first make sure you&#8217;re identified as a self employer. According to the IRS the following things must apply to you: <\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">You carry on a trade or business as a <\/span><a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/sole-proprietorships\"><span style=\"font-weight: 400;\">sole proprietor<\/span><\/a><span style=\"font-weight: 400;\"> or an <\/span><span style=\"font-weight: 400;\">independent contractor<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">You are a member of a <\/span><span style=\"font-weight: 400;\">partnership<\/span><span style=\"font-weight: 400;\"> that carries on a <\/span><span style=\"font-weight: 400;\">trade or business<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">You are otherwise in business for yourself (including a <\/span><span style=\"font-weight: 400;\">part-time business<\/span><span style=\"font-weight: 400;\">)<\/span><\/li>\n<\/ul>\n<h3><b>What Obligations Do Self Employers Have?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Usually you must file an annual return and pay a quarterly tax fee.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under federal law, the self employed must pay what is referred to as an <a href=\"https:\/\/huddlestontaxcpas.com\/self-employment-tax\/\">SE tax<\/a> in addition to income tax. SE tax is required because it is identified as the social security and medicare tax for individuals who work for themselves. It is often compared to the taxes that are withheld from the pay of wage earners for social security and medicare. &nbsp;In most cases when you hear someone refer to self employment tax they are primarily talking about social security and medicare taxes. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Next, determine if your company identifies as a net profit and or net loss. &nbsp;You can do this by subtracting your <a href=\"https:\/\/huddlestontaxcpas.com\/blog\/managing-your-small-business-finances\/\">business expenses<\/a> from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After<\/span><span style=\"font-weight: 400;\"> both of these are done, <\/span><span style=\"font-weight: 400;\">you head on over to the IRS website for <\/span><span style=\"font-weight: 400;\">Form 1040-ES. This is used to help you figure <\/span><span style=\"font-weight: 400;\">out your quarterly taxes. It also contains a worksheet that you will&nbsp;<\/span><span style=\"font-weight: 400;\">fill out that can help you estimate how much you should be <\/span><span style=\"font-weight: 400;\">paying in taxes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now it&#8217;s time for you to <\/span><span style=\"font-weight: 400;\">start focusing on how to <a href=\"https:\/\/huddlestontaxcpas.com\/blog\/how-to-file-your-first-income-tax-return\/\">file your annual return<\/a>. In order to file <\/span><span style=\"font-weight: 400;\">your return you will need to use Schedule C. &nbsp;Schedule C is used&nbsp;<\/span><span style=\"font-weight: 400;\">to report your income loss from a business you operated or a&nbsp;<\/span><span style=\"font-weight: 400;\">profession you once practiced. In most cases a Schedule C is&nbsp;<\/span><span style=\"font-weight: 400;\">used for employees and businesses who have expenses that are&nbsp;<\/span><span style=\"font-weight: 400;\">less than $5,000. &nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another popular question that is often asked is are you required to&nbsp;<\/span><span style=\"font-weight: 400;\">file an information return and the answer is yes. If you have made&nbsp;<\/span><span style=\"font-weight: 400;\">or received a payment as a small business or as a self employer&nbsp;<\/span><span style=\"font-weight: 400;\">you are required to file an information return which is defined as&nbsp;<\/span>a mandatory tax document that businesses must use to notify the&nbsp;<span style=\"font-weight: 400;\">IRS about such transactions. (For example, IRS Forms 1097,&nbsp;<\/span><span style=\"font-weight: 400;\">1098, 1099, 3921, 3922, 5498, and W-2 are all information&nbsp;<\/span><span style=\"font-weight: 400;\">returns.) Informing the agency about reported transactions is mandatory.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At the end of the day it is important that you know the law in your&nbsp;<\/span><span style=\"font-weight: 400;\">state. By understanding your tax law you will understand which&nbsp;<\/span><span style=\"font-weight: 400;\">tax forms you need to fill out, what taxes you\u2019re required to pay&nbsp;<\/span><span style=\"font-weight: 400;\">and most importantly you will be able to identify how the IRS&nbsp;<\/span><span style=\"font-weight: 400;\">views your business. <\/span><b><\/b><b> <\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Usually, yes. There are a handful of circumstances where you may not need to. Before going too deeply into this, first make sure you&#8217;re identified as a self employer. According to the IRS the following things must apply to you: You carry on a trade or business as a sole proprietor or an independent contractor. [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":3708,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"content-sidebar","footnotes":""},"categories":[20],"tags":[],"class_list":{"0":"post-2205","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes","8":"entry"},"_links":{"self":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/comments?post=2205"}],"version-history":[{"count":2,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2205\/revisions"}],"predecessor-version":[{"id":3813,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/posts\/2205\/revisions\/3813"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media\/3708"}],"wp:attachment":[{"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/media?parent=2205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/categories?post=2205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/huddlestontaxcpas.com\/wp-json\/wp\/v2\/tags?post=2205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}