Our team has been busy these past couple of months ensuring that our clients stay compliant with all of their regulatory bodies. October is a super busy month for tax filings with the IRS and other regulatory bodies because corporate income tax extensions, quarterly sales tax payments and employment tax returns are due.
We've got some clients that are considered self-employed, so this post is dedicated to understanding your obligations if you're self-employed.
Who is considered self-employed?
The IRS defines self employed as carrying on a trade or business as a sole proprietor or an independent contractor (i.e. 10-99), you are a member of a partnership, or you are otherwise in business by yourself. This means that even if you are are an LLC you could be paying self-employment taxes.
So, what are your obligations for filing employment taxes with the IRS?
How much self employment tax should you pay?
Before knowing how much you should pay for SE tax, you first need to know how much you've made for your business by determining your net income or net loss. Once this amount is determined, here are the next steps:
Self employment taxes are definitely something to keep in mind throughout the year, you don't want to have a huge penalty or balance due at the end of the year. Any questions or comments? Leave them below!