'Great Resignation': How becoming your own boss affects your taxes

The video tutorial explains the tax responsibilities of self-employed individuals, focusing on the need for quarterly estimated tax payments. It covers how to calculate these payments based on income and adjust them according to business fluctuations. The tutorial also highlights the importance of identifying deductions to reduce the overall tax bill and suggests consulting an accountant for better tax management.

What is a key difference in tax responsibilities between self-employed individuals and those working for an employer?

• Employers handle all tax payments for self-employed individuals.

• Self-employed individuals are exempt from paying taxes.

• Self-employed individuals pay taxes only once a year.

• Self-employed individuals must make quarterly estimated tax payments.

How often are self-employed individuals required to make estimated tax payments?

• Every month

• Four times a year

• Twice a year

• Once a year

What is the minimum percentage of the previous year's tax that self-employed individuals should aim to cover with their estimated payments?

• 90%

• 75%

• 100%

• 50%

Which of the following is a potential deduction for self-employed individuals?

• Vacation costs

• Commuting expenses

• Personal groceries

• Healthcare premiums

Why might a self-employed individual consider hiring an accountant?

• To avoid paying any taxes

• To identify deductions and manage tax obligations effectively

• To increase business profits directly

• To handle personal expenses