How to Do Your Quarterlies

As an independent contractor, you’re obligated to pay your own self-employment taxes, and if you're making a profit, you should do it at least every quarter to avoid a tax bite at the end of the year. Self-employment taxes are the equivalent of FICA taxes (Medicare and Social Security) that employers so handily deduct from workers’ paychecks.

Instructions

Difficulty: Moderately Easy

1. Estimate your sales for the year.
2. Estimate your expenses for the year.
3. Subtract expenses from your sales to get your estimated net profit for the year.
4. Let’s say you anticipate a net profit of $1,000 for the year. Multiply that by 15.3% (if it is $97,050 or less).
5. Divide by four, which gives you quarterly payments of $38.25.
6. Go online to the Internal Revenue Service website to get the payment vouchers. See the website below.
7. Write a check or get a money order.
8. Send to the IRS office address that corresponds to the state you live in. See the website below.

Tips & Warnings

• It's always wise to check with an accountant.