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Primer: Personal Income Taxes (sole proprietorships, partnerships) Maryland

If you operate a sole proprietorship or partnership, you must pay city, state, and federal income tax just like anyone else and you are responsible for paying it directly to the government. Federal income taxes must be paid in estimated quarterly payments. These payments are due in four installments on: April 15, June 15, September 15, and January 15. These federal taxes will cover your self-employment tax which includes social security and Medicare. This self employment tax makes working for yourself expensive because when you had a boss, your employer paid for half your self-employment tax and you paid the other tax. You will now be responsible for all of it, although a portion of it is deductible.

Local Companies

Jackson Hewitt - Four Corners
301-681-7180
109 University Blvd. West
Silver Spring, MD

Honig Tax Prep
301-768-4243
3810 Old Baltimore Dr
Olney, MD

Ellis & Company LLC
(301) 515-7502
20300 Seneca Meadows Parkway
Germantown, MD

Kinsley Management 1001 Partnership
(410) 272-0355
1003 Old Philadelphia Rd
Aberdeen, MD

Mariner Management & Marketing
(301) 725-2508
3517 Forest Haven Dr
Laurel, MD

Barton White Associates
(410) 557-0459
White Hall, MD

Keys Management and Training
(410) 448-2227
4111 Springdale Ave
Gwynn Oak, MD

American Lead Consultants
(301) 893-0445
179 Smallwood Village Ct
Waldorf, MD

Decision Path Consulting
(301) 926-7785
6 Montgomery Village A Ste 622
Gaithersburg, MD

McShea Management Co Inc
(301) 468-2115
1801 Rockville Pike
Rockville, MD

If your state has an income tax, you must pay it quarterly also. Cities may have their own tax rules.

Generally speaking, you must pay estimated quarterly installments if you expect to owe at least $500 in tax for a given year. The laws governing how much tax you must submit during the year require that you either pay 90 percent of the tax you will owe by the end of the year (to avoid penalties), or pay 100 percent of last year's tax (110% if your income exceeds $150K). This means that you can submit a minimum amount of tax during the year if you want to hold on to some of your money. However, this plan only works if you are able to leave the money intended for taxes alone. Too many people spend the money that they put aside then run into trouble at tax time. If you fail to make your payments on schedule and within these guidelines, you will be liable for penalties -- plus interest on the money you owe.

Your tax preparer should provide you with forms and envelopes for making your estimated payments, or you can order these forms directly from the IRS by calling 800-829-3676.

Featured Local Company

Jackson Hewitt - Four Corners

301-681-7180
109 University Blvd. West
Silver Spring, MD

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