Drivers Ed
NEWS DRIVERS CAN USE
ESTIMATED TAXES SIMPLY DONE
BY CAITLYN FUSS , SCI
Independent contractor delivery drivers (“ Owner Operators ”) in the final-mile Industry qualify as self-employed workers . This comes with the flexibility to make your own schedule , choose to accept or decline routes , and negotiate your settlements . This designation also comes with responsibilities that are different from employees of a company , such as sustaining quarterly tax obligations .
This article provides an overview of some key things to remember when paying your taxes so that you can keep up with withholding and estimated tax obligations . It is always beneficial to meet with a tax advisor for advice specific to you and your business .
Withholding and Estimated Tax Payments
Owner Operators do not have taxes automatically withheld from their income ; instead , Owner Operators are responsible for paying estimated quarterly income taxes directly to the IRS .
Paying as you earn prevents future cash flow issues , avoiding the struggle of making one large lump sum payment . This means you are less likely to owe a substantial amount when you file and are more likely to receive a refund of overpaid taxes .
Calculating Your Quarterly Taxes
Estimated quarterly taxes are due April 15th , June 15th , September 15th , and January 15th of the following year . Calculating your quarterly taxes can be stressful when you know mistakes can result in IRS penalties . However , with a few helpful tips and a good process in place , taxes can become as easy as paying any typical bill .
Check Your Tax Rate : Self-employed people owe an additional self-employment tax for Social Security and Medicare on top of Federal and State taxes ( consult IRS Self-Employment Tax section for the latest rates ).
Project Yearly Earnings : What you earn determines how much you will pay in quarterly taxes . Forecast your expected net annual earnings based on income history or projected future earnings . Consider what you paid the previous year in taxes and expect to pay at least that amount . If you are making significantly more than the previous year , you should up your quarterly payments to relieve the future tax burden .
48 customized logistics & delivery Magazine I winter 2024