An increasing number of Americans have discovered the benefits of self-employment. A recent study found that approximately 16 million Americans enjoy self-employment, which means they must make estimated tax payments throughout the year.
For other jobs, people receive paychecks with taxes already taken out. Self-employed individuals simply receive payments from an employer with no taxes deducted. While this results in more money in the short-term, it means self-employed workers have remain cognizant of when they must pay taxes. You still have to submit tax returns by April 15th, but you also need to send in payments on April 15th, June 15th, September 15th and January 15th of the following year. It is easy to miss a payment, especially if you just started self-employment. You could face penalties for missing a payment, so here is what you should do in the aftermath.
Make the payment as soon as possible
You may have missed your June 15th payment. A lot of people assume that they can simply make up for it in September, but your penalty increases each day you miss it. Instead of waiting, you should send in the additional funds as close to the deadline as you can. You may also need to talk with a professional tax accountant about other repayment options for your situation.
Avoid missed payments at all costs
It is easiest to avoid missing a payment in the first place. You should mark on your calendar when you have to pay taxes and set reminders on your phone. The IRS now allows self-employed taxpayers to submit payments online, so you do not even have to worry about sending in a physical copy of your taxes. It only takes a few minutes to submit online. You will only have to supply information related to your taxes for the previous year, so the IRS knows who you are.