If you owe self employment taxes based on your Schedule C is that payment included in your total tax liability or is it paid separately?

Wildsporty

You would be filing Schedule SE with your 1040 for self employment taxes.

You generally have to make estimated tax payments if you expect to owe tax, including SE tax, of $1,000 or more when you file your return. There are two ways to pay as you go: withholding and estimated taxes. If you are a self-employed individual and do not have income tax withheld, you must make estimated tax payments. These are usually made quarterly.

Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.

Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. If you do not pay enough through withholding or estimated tax payments, you may be charged a penalty. If you do not pay enough by the due date of each payment period you may be charged a penalty even if you are due a refund when you file your tax return.

If you had a tax liability for 2007, you may have to pay estimated tax for 2008.

General Rule
You must pay estimated tax for 2008 if both of the following apply.

You expect to owe at least $1000 in tax for 2008 after subtracting your withholding and credits.
You expect your withholding and credits to be less than the smaller of;
90% of the tax to be shown on your 2007 tax return, or
100% of the tax shown on your 2006 tax return. Your 2006 tax return must cover all 12 months.
Sole proprietors, partners, and S corporation shareholders - You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.

shirley

IntlTax

Self employment taxes are included in the total tax liability and are not paid separately.

ScottGem

Thanks Shirley, but I was aware of all that. Generally my side biz has been operating at a loss so the necessity of paying quarterly estimated taxes was not there. For 2007, however, advance royaltiies and fees from the books I have worked on resulted in a profit. But I had no clue what that would be so I chose not to make the estimates, just put the money aside. As this is the first year in a long time that I am claiming a profit, I believe I'm OK on that score. I will be looking at this more closely for 2008.

Thanks IntlTax,
That's what I was hoping to hear. I use Turbo Tax, which is giving me a total figure. I just wanted to make sure there wasn't another amount hidden someplace.

IntlTax

ScottGem, you should make sure that Schedule SE is properly calculating the tax and the self-employment tax should be shown as a separate number on page 2 of Form 1040, but it should also be included in total tax due.