For the self-employed, tax planning never stops. Without a regular paycheck, they have responsibility for their own tax tactics.
NEW YORK — Though the tax season is past us, some people must continue to pay taxes year-round: the self-employed. For them, tax planning never stops. Without a regular paycheck, they have responsibility for their own tax tactics.
If you are in this situation, you can save yourself time and money with these tips:
• Educate yourself on the self-employment tax. The best resource is the Internal Revenue Service’s Web site, www.irs.gov.
• Consider computerizing your record-keeping. Record-keeping is essential for accurately estimating your quarterly payments and filing your end-of-the-year tax return.
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• Make your estimated payments on time. Unlike salaried employees, the self-employed have no income withheld from their paychecks. They must estimate their income minus deductions and pay tax on these estimates four times a year — the 15th April, June, September and January (of the next year). By paying on time, you avoid late penalties.