Has it ever crossed your mind, as you were starting your new business…?
Now that you don’t have a paycheck anymore you’re not getting nailed for all of that pesky FICA tax anymore either?
Isn’t that GREAT?
Well, let me tell ya something my friend…
You still have to pay it. I’m sorry if this is bad news.
I hear you…you’re all like, “No, I don’t!”
Let’s take a little trip to your previous year’s tax return.
Flip to Page 2.
See that big number below the income tax calculation, that comes from Schedule 2? That’s called Self-Employment tax.
You pay it all at once as a sole proprietor.
So now you may ask yourself (does anybody else hear David Byrne from the Talking Heads?) …
What does this have to do with how the self-employed withhold tax?
The answer my friend (Bob Dylan, anyone?)
Is estimated tax payments.
Did you get your 3rd quarter payment in last Tuesday the 15th? No?
I’ll let you in on a little secret:
If you hop on and make a payment, they’ll take it late.
Just be sure to pay enough now, and by January 15th , so that you’ll be within $1,000 of what you’ll owe in April.
(Assuming next year’s deadline is back to “normal” again…)
Oh, and if you’re still building and scaling your business, and feel like you just haven’t made that much this year yet, that’s fine.
January 15th is your 4th and final chance to make estimated tax payments, and your best opportunity to reduce your April tax and eliminate underpayment penalties.
Good, fun, exciting sexy accounting stuff, am I right?!
If you have any questions, reach out and let me know – my first call is always free!
Check out the link below!
~~ Schedule Time with Me ~~