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Self employed
Hi @Jonathan_H
Thank you for joining us today and for the great questions.
- If you are single and your gross income is less than $12,950 you are not required to file a tax return. Keep in mind that there are benefits to filing such as building your self employment benefit or applying for financial aid. Here is a great link to the IRS website: Who Should File a Tax Return? I do recommend that you attempt to "Pay As You Go" to avoid any interest and penalties with the IRS as you will still owe self employment tax even though you may not owe federal taxes. The law sets the self-employment tax rate as a percentage of your net earnings from self-employment. This rate consists of 12.4% for social security and 2.9% for Medicare taxes.
- Estimating taxes for inconsistent income can be tricky. So it is recommended that you "pay as you go". Estimating your taxes each quarter based on your earnings year to date should ensure you get pretty close to your tax liability. Here is a tool that you can use to assist you: Estimated Tax Payments . This is another good reason to file your tax return annually, so if you do over pay you can claim that refund due to you!
Thank you!
Melanie, CPA
‎August 30, 2023
9:36 AM