I've been using these 3 products to pay taxes since I became self-employed, and the process couldn't be easier
- Self-employment is like running a business. You're in charge of everything, which includes balancing the books and paying your own taxes.
- If you don't pay your estimated quarterly taxes correctly, you could get hit with a huge penalty from the IRS.
- Getting set up with a business checking account, business credit card, and accounting software completely changed the way I do business, and I honestly wish I would have done it sooner.
- See Business Insider's list of the best small-business credit cards »
During my first year of self-employment, I'll admit I was flying blind. I made a lot of mistakes that year, the most costly of which was not getting my finances properly set up. When you're self-employed, you're running a business - even if it's just you.When tax season finally rolled around at the end of my first year, I spent countless hours trying to sort through income from dozens of different clients and comb through bank statements to figure out which expenses, if any, I could deduct. Once I finally got that headache sorted out, I filed my taxes and breathed a sigh of relief.Advertisement
That is, until I was hit with a massive penalty for not paying my estimated quarterly taxes.
As you may already know, if you're an independent contractor rather than a full-time employee, taxes aren't taken out of your paycheck each month. If you make over a certain income level, the IRS wants you to pay your taxes on a quarterly basis, based on an estimate of what you think you owe. Basically, they don't want to wait until next year to get their money.Between quarterly estimated taxes, juggling payment from multiple clients, and business deductions, taxes can get sloppy when you're self-employed. I learned after filing my earnings from my first year the importance of separating your personal and business finances and keeping track of your income and spending.
Several years later, I can genuinely say that doing my self-employment taxes is a breeze. Here are my three favorite products that help me get through tax season unscathed.
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A business checking account
A business credit cardAdvertisement
Accounting software for the self-employed
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