Estimated Payments for the Self Employed

For most employees, employers deduct Social Security and Medicare taxes from each paycheck to support retirement income and Medicare coverage. However, self-employed taxpayers pay for coverage through self employment tax. Generally, if you carry on a trade or business as a sole proprietor, an independent contractor, a member of a partnership that carries on a trade or business, or are otherwise in business for yourself, then you are considered self-employed.

Many self-employed people will have to make quarterly estimated tax payments. It’s important to remember that your self-employment tax will increase the total federal tax you owe. Be sure to take this into account when determining the amount of estimated tax to pay each quarter.

Publication 1518 (Rev. 11-2011) Department of the Treasury Internal Revenue Service