Hello, @billberman5 !
The total percentage you'll owe on your self employment income will vary based on your tax bracket (which is determined by your total taxable income). But, in general this is how it works.
Self employed taxpayers pay 2 taxes, both on the net income (after expenses):
1. Income tax, which is essentially calculated by adding the amount of the self employment net earnings to the taxable income (except that you get a deduction in the amount of 1/2 of the tax in #2 below)
2. Self employment tax, which is essentially 15.3% of the net self employment earnings.
I usually tell clients that if you pay 25% of your self employment net profit each quarter as an estimated tax payment, you will more than likely be paid up when you file your taxes.
Here are the quarters and dates due for estimated payments:
|1st Payment||January 1 to March 31||April 15, 2021|
|2nd Payment||April 1 to May 31||June 15, 2021|
|3rd Payment||June 1 to August 31||September 15, 2021|
|4th Payment||September 1 to December 31||January 18, 2022|
If you do not make estimated tax payments, and you end up owing taxes when you file your return, you will likely be charged a penalty for underpayment of estimated tax.
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