One major mistake many new Sole-Proprietors make is not budgeting for taxes due. Self-employment taxes are due quarterly on the following schedule:
For the period:
Due date:
Jan. 1 - March 31
April 15
April 1 - May 31
June 15
June 1 - August 31
September 15
Sept. 1 - Dec. 31
January 15 (next year)
Not paying these taxes, based on your previous year's income, is not an option.If you find that you can't pay the full amount of your estimated tax payment, it's better to -- at a minimum -- file your tax form and pay as much as you can by the due date. Filing on time and sending in a partial payment will at least help reduce any penalties and interest you will end up owing. In this IRS website article Filing Late/Paying Late, you can find information about an Installment Agreement Request, along with proposed monthly payment dates and amounts.Remember, your self-employment taxes increase the total federal tax you owe. Take this into account when determining your payment. Refer to Form 1040-ES for tax worksheets, tax rates, and specific information about payment options.