How much to put away for taxes when self-employed?

What’s the best way to calculate how much to put aside for taxes as a self-employed business owner with a new business? As I grow my business and raise the amount of profit, how do I get updated on the changing amounts of tax brackets for how much I pay?

5347

1 Best answer

Employee Tax Expert

May 22, 2024 9:41:44 AM

Self-employment tax includes both the employer and employee portion of Social Security and Medicare. This totals 15.3% on 92.35% of your net profit.
You will also want to include your federal income tax when paying your estimated taxes for self-employment.
The IRS requires you to pay quarterly estimated taxes if your'e going to owe more than $1,000.

The tax brackets dictate your tax rate and they can be found here: https://turbotax.intuit.com/tax-tips/irs-tax-return/what-is-my-tax-bracket/L3Dtkab8G#GoTo-What-are-the-2024-federal-income-tax-brackets-

Here is a great resource for calculating your self-employment tax: https://turbotax.intuit.com/tax-tips/self-employment-taxes/the-self-employment-tax/L8xXjolB4##

Hope this helps!

Cindy

Level 1

May 22, 2024 9:38:14 AM

This is a great question. I live in Alabama and I’m wondering the same thing.