You should not wait until the end of the year to pay estimated tax which should be paid quarterly. Self employment tax is 15.3% of your net self income. In addition you will pay income tax at your marginal tax rate on all of your income combined.
The U.S. tax system is "pay as you go". If you wait until the end of the year to pay all of your taxes due, you'll be hit with underpayment penalties.
Typically, if you send the IRS a minimum of 20% of your gross business earnings each quarter, then come tax filing time you'll be fine. I've been doing it that way for years and I've always been well within 10% of my total tax liability. Some years I get a refund. Some years I owe a bit more. But so long as what I owe does not exceed 10% of my total tax liability for the year, no fines or penalties are assessed.
You can pay your taxes each quarter on line if you want to, at www.irs.gov/payments. If you elect to do it that way, then remember to always print your receipt after making the payment, as proof you did make the payment. Just file the receipt with your business paperwork so you'll have it at tax filing time.
Quarterly tax due dates for 2023 are:
◾1st payment: April 18.
◾ 2nd payment: June 15.
◾ 3rd payment: Sept. 15.
◾ 4th payment: Jan. 16, 2024.
If you started your business at some time during the year after the 1st quarter, then payment is due at the end of the quarter you business opened in.
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