Generally, self employed individuals do not have federal and state income taxes, social security or medicare withheld from their pay. While this may sound like a loophole, it's not. In Fact, it means that self employed taxpayers are subject to some additional responsibilities. Each quarter, the IRS requires that these taxpayers make estimated quarterly tax payments. It is important that business owners plan on setting aside a portion of their income to cover federal and state income taxes as well as self employment tax. Apps like Hurdlr can automatically calculate your estimated taxes, taking into account your income and expenses, so you know what is safe to spend and what you should set aside for ongoing tax payments.
