We just wanted to give you a quick reminder that today is the due date for your quarterly tax payments for the fourth quarter of 2016.
Quarterly Tax Payments
If you expect to earn more than $400 in net profit from your self-employed business for the year, you'll likely need to pay quarterly estimated taxes. This is mainly comprised of the Self-Employment tax.
The current self employment tax rate is: 15.3 percent.
- 12.4 percent of this goes toward Social Security
- 2.9 percent for Medicare.
Remember, your quarterly tax payments are in addition to your annual tax returns, which are due on April 18, 2017.
How To Pay Your Quarterly Estimated Taxes
You can figure out your estimated tax liability using Form 1040-ES. Once you've determined what you should pay using that worksheet, you can pay a variety of ways, including through the mail or online.
Minimize Your Taxable Income With Deductions
Your quarterly tax payments can be tied to what you expect your net taxable income to be. One way to lower your taxable income is by maximizing your deductions. Here are some of the major write-offs that most self-employed workers can take advantage of:
- Mileage Deduction - Deduct the cost of every single business drive. At 53.5 cents per mile in 2017, this can quickly add up.
- Home Office Deduction - You can write off the space you use in your home for work purposes as long as it fits the IRS requirements.
- Business Expense Deduction - Virtually any reasonable business expense can lead to a tax write off.
