Taxes: How much should Independent Contractors pay in estimated taxes

Recently, I was asked how much in taxes should be paid when receiving payment. I exampled that when you are an independent contractor you are treated like a business owner from a tax perspective. That can be a good and bad thing if you don’t fully understand how to leverage being a business owner from a tax perspective.

Many side hustlers, solopreneuers and entrepreneurs are not aware that the Internal Revenue Service (IRS) requires business operators to file estimated payments, which are due quarterly, on the following dates every year. January 15th, April 15th, June 15th, and October 15th.

When you don’t pay your estimated payments and you owe money to the IRS, they are kind enough to apply a penalty for not paying those payments.

I want this young solopreneur to avoid any penalties so i recommended that he pay his estimated taxes monthly instead of quarterly due to the typical money psychology that most people have.

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