Withholding. If you work for a company as an employee, your employer takes taxes out of each paycheck, known as "withholding." The withholding goes toward income, Social Security, and Medicare taxes.
Estimated taxes. If you're self-employed, you work for yourself, and you have to do your own withholding. You have to estimate your income, expenses, and deductions and pay taxes on the estimates on a quarterly basis.
Referred to as “quarterly” taxes, you’re required to make payments on these estimates 4 times a year. These payments go towards your self-employment tax, which is a tax that covers your share of Social Security and Medicare taxes on the self-employed money you earned. Because you’re your own employer, you get to be the one to set aside money to cover the tax and send it to the IRS throughout the year.
Good news: You don’t have to figure out the correct estimate amounts all by yourself. We will help you calculate the amount due, and even assist you with setting up your IRS payment portal known as EFTPS linked here https://www.eftps.gov/eftps/direct/EftpsHome.page.
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