Self-Employment Tax Calculator
Every self-employed person has to pay self-employment taxes on their self-employment earnings of $400 or more. The IRS considers you to be self-employed if you are a freelancer, independent contractor, or if you have your own business.
Use this self-employment tax calculator to estimate your self-employment tax, then read on for more information about paying your self-employment taxes to the IRS.
Disclaimer: This calculator is designed for informational purposes only and does not constitute legal, business, or tax advice. Users should consult their own tax advisors for personalized guidance. Bench assumes no liability for actions taken based on the results provided by this calculator.
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Tips and trends for managing self-employment taxes
Schedule SE: A Simple Guide to Filing the Self-Employment Tax Form
If you’re self-employed, you have to pay self-employment tax to the IRS. And to do that, you need to file Schedule SE. Here’s what you need to know.
Estimated Tax Payments: Deadlines and How to Pay
In this guide, we’ll show you how to calculate and pay your federal estimated quarterly taxes, and walk you through an example that clarifies the process.
19 Self-Employment Tax Deductions
We’ve compiled the most common 1099 and freelance tax breaks. Read it through, and check it twice to make sure you don’t miss out on any tax savings.
Frequently Asked Questions
Setting aside funds for small business taxes is crucial to avoid unexpected liabilities. A general guideline is to reserve 30% of your business income for federal and state taxes. This percentage can vary based on factors like your business structure, income level, and allowable deductions. Regularly reviewing your financials and consulting with a tax professional can help determine a more accurate amount to set aside, ensuring you're prepared for tax obligations without overestimating. Read more in our three-step guide to setting aside money for taxes.
Filing taxes as a small business owner is essential to comply with legal obligations and avoid penalties from the IRS. The process involves several key steps:
- Determine Your Business Structure: Your tax responsibilities vary based on whether you're a sole proprietor, partnership, LLC, or corporation. Each structure has specific forms and requirements.
- Obtain an Employer Identification Number (EIN): An EIN is necessary for most businesses and is used to identify your business for tax purposes.
- Understand Your Tax Obligations: This includes income tax, self-employment tax, employment taxes if you have employees, and possibly excise taxes, depending on your business activities.
- Keep Accurate Records: Maintain detailed records of all income and expenses to ensure accurate reporting and to substantiate deductions.
- File the Appropriate Tax Forms: Based on your business structure, you'll need to file specific forms, such as Schedule C for sole proprietors or Form 1120 for corporations.
- Pay Estimated Taxes: If you expect to owe at least $1,000 in taxes, you're generally required to make quarterly estimated tax payments to avoid penalties.
- Consider State and Local Taxes: In addition to federal taxes, be aware of any state and local tax obligations, which can vary by location.
Read more in our complete guide to filing taxes as a small business.
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