It is very different having taxes automatically taken out of your paycheck and having to remember to pay them automatically on a quarterly basis. Most people d

It is very different having taxes automatically taken out of your paycheck and having to remember to pay them automatically on a quarterly basis. Most people don't realize how big of a chunk gets taken out. And as was mentioned, as a self employed individual you also pay the "employer's" piece of Social Security which is an extra 7.5%. If you're incorporated there may be taxes related to that. I pay a yearly fee for the privilege of doing business in Connecticut. I also must file a yearly annual report with the state; which comes with a processing fee. I also pay property taxes on business property, such as computers and desks and chairs. My accountant has me list all of these. Many people go into sticker shock when I tell them to put aside 40% of their income to pay taxes.