Quarterly estimated tax for sole proprietors

ole proprietors are required to file taxes a lot more frequently than most everyone else. Usually there is one time of year when people are stressing about filing their taxes. But for the sole proprietor filing taxes once a year would be a relief. They have to file their taxes quarterly.

They do not only do the once yearly, common filing of their taxes, they actually have to file their taxes FOUR times per year. Some people ask if they really have to pay these taxes all four times during the year. The answer to that question is yes, definitely. If they do not file them then they could get themselves into big trouble.

If a sole proprietor did not file his taxes quarterly he would get into big trouble with Uncle Sam. Uncle Sam would then be able to charge them interest as well as charge nonpayment penalties. If you earned income during a tax quarter then you have to pay taxes on that quarter else you will be penalized.

The self-employment tax consists of three different parts. It is not just one basic tax on whatever you earn. There are three different areas where you are taxed. These three areas are:

1. The federal income tax. This is the same tax that everyone has to pay on his or her yearly income. Whatever you make, the government takes part of it from you and uses it for their own purposes. This is very lame but nevertheless, it is a law. The government has power to take your money from you and use it for their purposes.
2. You have to also pay social security tax as a part of the self-employment tax. This is also very lame. Even though they say that you will get this money back once you retire, it is impossible that you will ever get as much back as you are required to pay and it is also possible that by the time you retire, social security will be done away with. So once again, the government takes your money from you and uses it for their purposes.
3. The last part of the self-employment tax is the Medicare tax. If the other two taxes were lame, this tax is extra lame. The government takes your money from you and pays other people's medical bills, creating a society that is dependent on the government and which increasingly gives the government more and more power.

All these three tax areas make up the self-employment tax. It is not just income tax. It is income tax, social security tax and Medicare tax. These are the three taxes that a sole proprietor has to file every quarter of every year. That is a lot of money taken from them.

If you are paying self-employment tax quarterly the law is that you pay 15.3% of your money on 76,200 dollars worth of income. Any more than that which you earn you only pay 2.9%. That means that of 76,200 dollars you would be giving 11,658.60 dollars back to the government.and you may have to give back more than that if you are making more than 76,200 dollars.

That means that in a year you would be giving 46634.40 dollars to the government. They are allowed to just take that from you. That is more money than a lot of people make during a year. And it all just goes to the government. That is seems pretty crazy but it is unfortunately true. That is how much you are required to pay and if you do not pay it then you will just be required to pay more and more. Better pay your self-employment tax.