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Self employed? You still need to pay taxes

Being your own boss can be enormously fulfilling, but it can be enormously stressful as well. Being self-employed gives you the freedom to run a business as you see fit, but it also puts all the obligations and responsibilities of a traditional employer on your own shoulders.

One such responsibility includes paying employment taxes. Just because you might be your own boss and may be the only employee at your company does not mean you are exempt from paying taxes. If you are starting your own business or have started your own business in the past few months, you need to know about income and self-employment taxes now in order to avoid complications and run-ins with the IRS when you file your return next year.

To begin with, you should understand that not every self-employed person needs to remit taxes to the IRS. Unless your net earnings are $400 or more, you do not need to file an income tax return.

There are also self-employment taxes that need to be taken into account. When you work for another employer, that employer is expected to withhold a percentage of your pay for Social Security and Medicare. However, when you are your own employer, you must be sure that you are making these taxes payments yourself. In some cases, you may need to make estimated tax payments every quarter.

Failure to pay income or self-employment taxes can prove to be a very costly mistake. You could wind up facing costly penalties and interest payments that could be overwhelming for a person who is self-employed.

If you have questions or concerns about your tax obligations as someone who is self-employed, it can be crucial that you address them with an attorney sooner, rather than later. Acting fast can help you get on the right track and make the right decisions to avoid mistakes with your taxes that could come back to haunt you in the next year.

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The Peck Group, LC

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Located in Atlanta, The Peck Group, LC, represents clients nationwide. Regionally, we are committed to serving clients in Fulton County and throughout the state of Georgia.