Self-employment taxes should be paid quarterly.
The rationale behind this requirement is based on the pay-as-you-go system for federal income taxes, including self-employment tax. Individuals who are self-employed generally need to make estimated tax payments on a quarterly basis if they expect to owe $1,000 or more when they file their return. This system ensures that taxes are paid throughout the year as income is earned, rather than in a lump sum at the end of the year.
According to the retrieved information, self-employment tax is a social security and Medicare tax for individuals who work for themselves, and it is similar to the social security and Medicare taxes withheld from the pay of most wage earners. The estimated tax payments are calculated using Form 1040-ES, and these payments are typically made quarterly.
Additionally, the statute § 6654 outlines the requirements for making estimated tax payments, specifying that the amount of any required installment shall be 25 percent of the required annual payment, which further supports the quarterly payment structure.
Therefore, self-employment taxes should be paid quarterly to comply with the IRS requirements and avoid potential penalties for underpayment or late payment of taxes.
Sources:
Publication 1582
Publication 583 (1/2021)
Publication 1518 (11/2012)
§ 6654. Failure by individual to pay estimated income tax
Publication 4128 (5/2020)
Publication 334 (2023)
