Today is Jan 15th, and Q4 2007 estimated tax payments are due (in the US). If you’re self-employed, you estimate your tax liability during the year and make “withholding” payments (4) along the way.
If you’re self-employed, you have the privilege of paying two additional taxes (on top of income tax): self-employment tax (12.4%) and Medicare (2.9%). The SE tax phases out at $94,000, but the Medicare tax applies to your entire self employed income.
If you’re consulting, keep in mind when setting your rates that your marginal tax rate (combined state and federal) may be over 50%.
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