Self-Employed with IRS Problems: You're Not Alone
Self-employed taxpayers are the IRS's favorite target. No employer withholding taxes for you. Estimated payments that are easy to skip when cash is tight. Business deductions that attract scrutiny. If you're self-employed and owe the IRS, you're in good company. And you have options.
Why Self-Employed Taxpayers Get in Trouble
No automatic withholding. Quarterly estimated payments that feel optional when money is tight. Business expenses that blur the line between personal and professional. It's a recipe for falling behind, and the IRS knows it.
Self-Employment Tax
Beyond income tax, you owe self-employment tax — 15.3% covering both the employer and employee portions of Social Security and Medicare. Many self-employed taxpayers don't account for this and end up owing far more than expected.
Resolving the Debt
The same tools available to W-2 employees work for self-employed taxpayers: Offers in Compromise, installment agreements, Currently Not Collectible status, penalty abatement. The financial analysis is different because self-employment income fluctuates, but the options are the same.
Going Forward
Once we resolve the current debt, I help you set up a system so it doesn't happen again. Estimated payments. Proper record-keeping. Quarterly check-ins. Prevention is always cheaper than resolution.