Being the boss is fun, except when you have to juggle accounts to pay bills, or deal with an irked customer or make sure your taxes are paid.
OK, maybe being the boss isn't everything it's cracked up to be. But lots of folks still opt for self-employment, either by choice or because they've been nudged into it by downsizing.
You're on your own with that angry customer, but Bankrate does offer some tips for small business success.
And I am here with a tax tip, specifically a reminder to all my fellow sole proprietors that the next estimated tax payment is due Thursday, Sept. 15.
While self-employed folks make up a big part of estimated tax payers, these extra tax payments also must be sent to the Internal Revenue Service to cover taxes on such things as moonlighting income and profits on asset sales.
Estimated taxes are due four times a year:
- April 15 to cover earnings between Jan. 1 and March 31,
- June 15 for earnings between April 1 and May 31,
- Sept. 15 to cover earnings between June 1 and Aug. 31, and
- Jan. 1 of the next year for taxes due on income received between Oct. 1 and Dec. 31.
Basically, estimated taxes are the equivalent of payroll taxes collected from folks who get regular paychecks. But since you're the boss, you have to make sure you send in the proper amount of tax due on your freelance or other untaxed earnings.
The IRS prefers you estimate how much such income you'll have each year and then send in four equal tax payments on the amount. But technically, you don't have to pay the estimated taxes until you've actually earned the income. So if you don't make any untaxed money this year until Nov. 20, then you don't have to worry about filing a Form 1040-ES until next January.
Of course, when you don't send in the four equal payments, the IRS likes you to explain why. That means extra calculations and paperwork.
Yeah, as I said, being boss isn't always easy. But you need to make sure you don't miss any tax deadlines, including this week's Sept. 15 estimated tax payment.
And remember, if you have to pay Uncle Sam, that means your business is making money.
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