Generally, self-employed individuals do not have federal and state income taxes, Social Security, or Medicare withheld from their paychecks. While this may sound like a loophole, it's not. In fact, it means that self employed taxpayers are subject to some additional responsibilities, which is why it is important for you to understand your tax obligation and quarterly payments.

Each quarter, the IRS requires that self-employed entrepreneurs make estimated quarterly tax payments. It is important for business owners to plan on setting aside a portion of their income to cover federal and state income taxes as well as self-employment tax. Hurdlr automatically calculates your estimated taxes, taking into account your income and expenses, so you know what is safe to spend and what you should set aside for ongoing tax payments.

The best way to remit your estimated taxes to the IRS is to complete Form 1040-ES and send in your quarterly tax payment vouchers. Your Self Employment Tax liability will be included as part of your estimated tax payment if you use Form 1040-ES to calculate your estimated payments. You should visit your state's tax and revenue website for state specific payment vouchers.

You can compute your estimated quarterly taxes based on your prior year earnings or by projecting your current year income, which is the method Hurdlr uses.

Your estimated tax payments are due on or around the following dates:

By making estimated quarterly payments you will be in compliance with IRS requirements and save on interest and penalties. You will be subject to underpayment penalties unless you make estimated payments equal to 90% of the tax shown on your current year return or 100% of the tax shown on your prior year return. If you did not have any tax liability in the prior year or owe less than $1,000 you will not be subject to underpayment penalties.

The IRS requires self-employed taxpayers to pay estimated taxes throughout the year if they expect to owe more than $1,000 in taxes after subtracting withholdings from a W-2 job, plus tax credits.

If you fit the above description and expect to owe estimated taxes, here’s the good news: you don’t have to complete and file a complicated return each quarter; just make an estimated payment to the IRS either online, by phone, or through the mail before the due date each quarter.

To make estimated tax payments online at any time, visit this site: https://www.irs.gov/payments.

You may also be required to make quarterly estimated payments to your state throughout the year. Since each state has different rules for estimated tax payments, refer to your state’s Treasury or Revenue website for more information.

Once you’ve made a quarterly tax payment, be sure to track it as a tax payment in Hurdlr.

Disclaimer: The information contained here is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.