Having your own business and being self employed provides you with some great benefits, especially with regards to flexibility of work schedules. Still, there are some things that you would still have to do, and this includes paying for self employment tax. Here are the steps on how to make filing for taxes painless and stress free.
Get an SSN or ITIN
An SSN, or Social Security Number, is required for taxpayers. If you are a non-resident or resident alien, then you will need to get an ITIN, or an Individual Tax Identification Number. These are required so that you will have to pay for taxes. You can apply for these at your local Social Security Office.
Compute for your taxable earnings
Taxable earnings are equal to your total revenue minus total expenses multiplied by a certain rate, which is currently at 92.35 percent. If you are unsure of how to go about this, then it would be wise to hire an accountant or bookkeeper to do this for you. Once you’ve computed for your taxable income, you will be able to get an idea of how much you would have to pay for in taxes.
Factor in tax deductible items
Items such as charitable contributions or insurance premiums can significantly decrease your tax payments. Do not forget to document these and itemize these in your report in order to enjoy tax deductions. Again, a competent accountant can greatly help you in putting all of these to order.
Make the payment
Taxpayers can utilize the Electronic Federal Tax Payment System, or EFTPS, to pay your taxes. Simply register to the site and you can enter your information there. Payments can be made through your checking account or via credit card.
The site also offers information as to when payments should be made. Make sure to pay your taxes on or before the deadline in order to avoid having to pay for penalties and other fees.
Paying for self-employment tax can be quite easy once you’ve done it a couple of times. Alternately, you can hire an accountant to do all of that for you. Being able to pay for self-employment taxes will ensure that you will not have any legal troubles, and that you are doing your duty as a citizen of the country. For any additional questions or concerns, you may contact the Social Security office, visit the EFTPS website, or consult your local accountant for more details.