How can the self-employed create tax tables to calculate their taxes?


Quick Answer

Self-employed individuals interested in creating tables to calculate taxes can use Internal Revenue Service Form 1040-ES, a tax worksheet and guide. As of 2015, self-employed individuals are required to pay estimated taxes in quarterly installments throughout the year if they meet IRS income and withholding requirements, says the IRS.

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Full Answer

An individual who is self-employed must pay estimated taxes throughout the year if one of two things are true: one, he expects to owe at least $1,000 in tax for 2015, or two, any withholding or tax credits are either less than 90 percent of his 2015 taxes or equal to his 2014 taxes. Self-employed individuals with no withholding or tax credits who expect to owe at least $1,000 in tax for 2015 must pay estimated taxes, according to the IRS.

To calculate estimated taxes for 2015, self-employed persons can download Form 1040-ES from IRS.gov. The form includes an overview of tax requirements, a worksheet with instructions and payment vouchers to mail in with quarterly estimated tax payments. By completing the worksheet, the self-employed individual creates a tax table that calculates the estimated amount of tax owed for 2015, states the IRS.

To complete the Form 1040-ES worksheet, taxpayers should have the following information ready: expected income from self-employment, any Social Security retirement or disability income and any wages earned from an employer that are subject to Social Security withholding, according to the IRS. The form provides step-by-step instructions for entering, subtracting and multiplying the figures entered to calculate the amount of estimated taxes owed.

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