One of the biggest shocks of self-employment is learning the IRS expects you to pay tax four times a year, not once. Miss it and you can owe penalties on top of the tax. Here's the plain-language version so it never catches you off guard.
Why quarterlies exist
When you have a job, your employer withholds tax from every paycheck. On your own, no one withholds anything — so the IRS asks you to send estimated payments through the year instead. It's the same tax, just paid as you go.
Who owes them, and when
If you expect to owe a certain amount for the year, you generally make four estimated payments on set dates. Marking those dates and paying a slice of every invoice you receive keeps you from a giant, penalty-laden bill at tax time.
A simple way to stay safe
Many self-employed people set aside a fixed percentage of every payment into a separate "tax" account, and pay from it each quarter. It turns a scary unknown into a routine.
Verify every step at the official source
Don't take anyone's word for the rules — including ours. Confirm current details here:
Never get surprised at tax time
TROVELL's Self-Employed Edition gives you the tax calendar and the set-aside system — plainly, with every rule pointed to its source.
Browse the Reference LibraryThis article is general information for educational purposes only. It is not legal, medical, tax, or financial advice, and it does not tell any reader what to do. Rules and benefits change and vary by state — confirm your situation with a licensed professional and at the official sources above.