Decee R asked:
When you are self employed in the USA aren’t you supposed to set aside 15% each paycheck and send it in to the feds each quarter (3 months)?
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Decee R asked:
When you are self employed in the USA aren’t you supposed to set aside 15% each paycheck and send it in to the feds each quarter (3 months)?
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5 users responded in this post
Federal self-employment tax is 15.3 percent. A self-employed person needs to contact their local Internal Revenue Service agency, and their local state agency to determine their tax responsibility.
Read more about self employed tax filing and estimated tax:
The IRS has set up for a person to make 4 estimated payments per year. The dates don’t work out exactly quarterly. They are April, June, Sept. & Jan. Self-employed tax is 15.3% of 92.35% of your net business income. You should also pay income tax quarterly, not just self-employment tax. Here’s a link to the estimated tax page on the IRS web site. It has a worksheet to help a person figure out how much he/she will probably owe. If you don’t pay estimated and end up owing a whole lot in April then they can charge you penalties.
It’s actually 15.3% of 92.35% of your net income, then you can take half of it off as an adjustment on your return, so it actually calculates to around 14%. But yes you should send it quarterly to the feds, along with whatever income tax you expect to owe on your se income.
the 15% is just the FICA tax - you also have income tax of 10-30% depending on house much profit you’re making, so 25-40% of profits is what you should be putting aside and paying quarterly
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