Who Falls Under Self-Employed Taxes Laws?

You have to pay self employed taxes on your income if no employer is responsible for your tax filing. This generally applies to people who work full-time for themselves, such as sole proprietors or independent contractors. However, even those people who earn a part-time income of more than $400 a year through independent efforts must pay a self-employed tax.

How much do I Owe?

The basic self employed tax is 15.3% in 2008-2009. This may go up in the future. 12.4% of this goes toward social security tax. 2.9% goes toward Medicare tax. You should know this is only the federal tax, and your state may also withhold earnings. The first $102,000 of your income is taxable in 2008-2009. This amount is also subject to change.

How do I Pay?

It is important to know taxes are paid on a "pay-as-you-go" basis in the United States. If you wait until the end of the year to pay any amount of taxes, then you will face a penalty. You can pay regularly through income withholding. When you work for yourself, income is not typically withheld. This means you will have to make estimated payments each quarter. At the end of the year, you will get a refund if you estimated too high. The IRS provides this tool for estimation.