If you are a sole proprietor, a partner in any form of partnership or a member in a limited liability company, you must file your own estimated self-employment taxes. When you work for others as an employee, your employer withholds your taxes from your paycheck. As an employee, your employer pays half of your social security taxes and you pay half. When you are self-employed, you must pay the entire amount.
Estimated taxes are normally paid quarterly on actual income. If you do not have taxable income, you do not have to pay estimated taxes. If you expect to owe the IRS more than $1,000 in federal taxes, you must make federal estimated tax payments using Form 1040-ES. The IRS prints a number of useful publications regarding your income tax rights and responsibilities including Publication #334, “Tax Guide for Small Business,” Publication #505, “Tax Withholding and Estimated Tax,” Publication #533, “Self-Employment Tax” and Publication #587, “Business Use of Your Home.” Contact the IRS directly for these publications and any additional information on calculating your taxable income and federal tax payments.
Colorado income tax is a flat 4.63% of your adjusted federal taxable income. If you expect to owe Colorado more than $1,000 in state taxes, you must pay state estimated tax payments. Estimated payments are made using the Colorado Form 104-EP. FYI, Income #51: Estimated Income Tax.