Self-Employed Quarterly Taxes

By Devra Gartenstein
Reconcile estimated tax payments with your actual tax obligations by April 15 of each year.
tax forms image by Chad McDermott from

As a self-employed individual, your tax filing schedule will depend on the volume of business your company transacts as well as your past earnings. While people holding conventional jobs are responsible for paying annual taxes only on their own income, your self-employed status also makes you liable for quarterly tax payments on your payroll and your gross business revenue. In addition, you must mail quarterly estimated tax payments to the federal government.

Revenue Taxes

Depending on your total business income, your company will most likely be liable for quarterly revenue payments to your state and local governments. To register your company to receive state and local tax forms in the mail, apply for all necessary business licenses when you start your company, and keep these licenses current by renewing them annually. State and local revenue taxes are calculated as a percentage of your gross business income, or the total of your receipts before subtracting any business expenses.

Payroll Taxes

If your company has employees, you are liable for withholding federal income tax as well as Social Security and Medicare taxes, and filing quarterly federal payroll tax forms. When you register as an employer, the Internal Revenue Service will provide you with a schedule for depositing payroll taxes into the bank or directly into an IRS account through an electronic funds transfer. You may be required to pay weekly, monthly or quarterly. Regardless of your payment schedule, you must file quarterly payroll tax forms documenting the amount you have paid in wages as well as the amounts of your tax deposits.

Estimated Tax Payments

As a self-employed individual, you must estimate the amount of personal income tax that you will owe on business income, and mail these payments to the IRS four times per year. The due dates for these payments do not precisely correspond with the due dates for state and local taxes, and federal payroll taxes. Rather, the due dates for estimated tax payments are April 15, June 15, Sept. 15 and Jan. 15 of the following year.

Reconciling Estimated Tax Payments

To calculate your actual self-employed tax obligation, fill out IRS Form 1040 Schedule C, which asks for your gross business revenue and also lists the various types of expenses that your business incurs such as rent, payroll and materials. Your taxable income is your company's net profit, or the amount remaining after subtracting gross expenses from gross income. You are liable for self-employment tax on this amount, which covers Social Security and Medicare contributions, and you also must pay self-employed income tax. If your quarterly estimated tax payments do not cover your total tax obligation, you must pay the balance as well as a penalty. If your estimated payments exceed your actual tax obligation, you may request a refund or apply the balance to the coming year.

About the Author

Devra Gartenstein has owned and run a variety of food businesses for more than 20 years. She has published two cookbooks: "The Accidental Vegan" and "Local Bounty." Gartenstein holds Master of Arts degrees in philosophy and English literature.