Max’s Answer

Great question. When you work for an employer, taxes are usually taken out of each paycheck automatically. When you’re self-employed, that typically doesn’t happen. Instead, the IRS generally expects you to pay taxes throughout the year using estimated tax payments. Think of it as paying your taxes a little at a time so you don’t get surprised by a large tax bill when it’s time to file your return.

Max’s Tip

Try setting aside a portion of every payment you receive into a separate tax savings account. A little preparation today can help prevent a lot of stress later.