Every individual taxpayer is ultimately responsible for filing and paying their own taxes. This burden carries additional obligations, however, when the taxpayer is self-employed.
According to the IRS, you are self-employed if “you carry on a trade or business as a sole proprietor or an independent contractor.”
Being self-employed can bring you great power, but also great responsibility. Therefore, it is important to remember the tax obligations that come with being your own boss. When you are self-employed, you don’t have an employer withholding taxes on your behalf. Therefore, you are expected to make quarterly estimated tax payments to cover your Social Security, Medicare, and income taxes for the year.