What I do is send the IRS 20% of my *gross* business income each quarter. Then at tax filing time it is rare (extremely rare) for me to owe any more tax on my business income. It's more common for be to get some of that refunded back to me.
I don't waste my time with the worksheets and all that crap.
Overall, on just the business income alone, you're going to pay "regular" taxes where the tax rate is determined by your overall total AGI. You're also going to pay an additional 15.3% Self-Employment tax on the business income only. That SE tax is basically the employer side of your Medicare and Social Security. Now you may be thinking the total tax paid would be more than 20%. It will. But at tax time when you figure in all your deductible business expenses, it will come out to "about" 20% of your *gross* business income; give or take a few percentage points.
It the two tax years I actually owed the IRS more, it was less than $500. That's nothing. I just wrote the check and was done with it.
