Should I Pay My Self-Employed Taxes Quarterly or Annually?

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Most U.S. taxpayers only need to worry about filing a return once a year. However, if you are self-employed or have a regular job with a small business on the side, you may be required to pay your self-employment taxes quarterly.

Who needs to file a quarterly tax return: Generally, employers that withhold income, Social Security, and Medicare taxes from an employer paycheck or are responsible to pay the employer portion of their own Social Security and Medicare taxes need to file a Form 941 on a quarterly basis. There are exceptions to this requirement; if your overall liability for federal income tax, Social Security and Medicare will be less than $2500, then you may choose to pay your taxes annually when you file your individual return.

An amount of $2500 is a relatively low amount for your combined total tax burden. This would mean the net revenue from your business would only be in the neighborhood of $10,000 to $15,000. If you run a side business where you only make sales sporadically, then it is very possible you fall into this range. However, if your business is full-time, you are likely bringing in far more than this amount and you should plan to file a Form 941 quarterly. It should be noted that even if you fall below the $2500 threshold, you might still choose to pay your taxes quarterly if you find this to be a better option for you.

Self-Employment Tax Filing Schedule

The deadlines for filing your Form 941 and paying your quarterly taxes are as follows:

1st Quarter 2014: April 15, 2014

2nd Quarter 2014: June 16, 2014

3rd Quarter 2014: September 16, 2014

4th Quarter 2014: January 15, 2015

Businesses who fail to meet these filing deadlines may be subject to penalties and interest, so be sure to mark these dates on your calendar.

If you need help, Seek Professional Guidance: If you are required to file quarterly self-employment taxes but for whatever reason have been neglecting this obligation, speak to a tax professional who can help you get back in compliance. In the event of an audit, ignorance is not an acceptable defense. It is best to take action now to ensure that your business will not run into any tax trouble down the road.


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