When someone earns cash, there is not tax withholding. Therefore, that person is liable to pay taxes. Can taxpayers make monthly payments to the IRS in order to avoid any debt at the end of the year?

Yes, taxpayers can perform what is called “estimated tax payments” to the Internal Revenue Service (IRS) in order to avoid declaring their tax debts. By making the “estimated tax payments”, taxpayers shall comply with the payment for federal taxes, state taxes, Social Security and Medicare. These four taxes are required for everybody working in the United States.

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Category: Self-employment