So I consult on the side and also maintain a full time job. Last year, I was a full-time consultant only. So, my question is how taxes work - will I have to pay my consultant fees and then wait for a tax refund check to come in? Or will they balance out somehow? Will they exist outside each other? Ideally I wouldn't have to save up taxes and would just pay the amount, but I'm not sure if that's how life really is..
Diane,
I assume you are referring to estimated Self-Employment taxes.
For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date.
If you do not pay enough tax by the due date of each of the payment
periods, you may be charged a penalty even if you are due a refund when
you file your income tax return.
To find out if you do or do not have to pay estimated taxes, read this guidance from IRS.gov on Estimated taxes.
NicoleD | Former Moderator | 10/11/2010 - 8:12 am
Join The Discussion
You must be logged in to join the discussion. If you already have an SBA Community account, Log In to join the discussion.
New users, Register for a new account and join the conversation today!