Withhold amounts from clients' payments to you, so you can pay taxes.
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As a self-employed person, your federal taxes differ from those of employees. You carry more responsibility for taxes, including withholding part of your income each month so you have enough to pay your taxes. Though you don’t have an employer to estimate your taxes and withholding, you can do it yourself by making some educated guesses.
You must pay a self-employment tax of 13.3 percent as of 2012; the normal rate of 15.3 percent was temporarily reduced starting in 2011. This covers your Social Security and Medicare taxes. Employees pay less than this,
because employers pay a portion of their Social Security and Medicare.
Because you're self-employed, plan on withholding 13.3 percent of your earnings so you can figure this tax. Use Schedule SE to calculate your self-employment tax. Attach this schedule to your tax return.
Federal Income Tax Deductions
Your Tax Bracket
Look at the income tax rates published each year by the IRS. Find your top tax bracket. You won’t pay the percentage listed in that tax bracket for all of your earnings, because only part of your earnings fall into that bracket. The IRS charges lower percentages on the part of your income below your top tax bracket.
Add Self-Employment and Income Withholding