For most Oklahoma residents, paying taxes is an “out of sight, out of mind” process. Salaried employees (teachers, factory workers, police officers, etc.) automatically have taxes deducted from their paychecks. An employee may notice that his paycheck is smaller than usual thanks to a new federal, state, or municipal tax, but there's not a whole lot he can do about it.
Matters are much different for self-employed individuals, including freelancers, consultants, and independent contractors in Oklahoma. If you are in this category, then you are responsible for paying your own state, local, and federal taxes on a quarterly basis—which means you must realize just how much of your salary has to be forked over to the government.
If you earn $4,000 or $5,000 per month, you may be tempted not to file any estimated taxes, on the premise that you earned it, and you get to keep it. This is a big mistake. The fact is, the government doesn't care whether you are self-employed in Oklahoma or a salaried worker; it simply wants its cut of the proceeds.
A good mental strategy is not to claim ownership of the entire $4,000 or $5,000 you earn every month, but to consider the government a silent partner which is entitled to 20 or 25 percent of your income. In other words, don't spend every penny you make, but set aside a portion to pay your taxes!
Are you trying to get your arms around the estimated tax system in Oklahoma? Don't despair; call the Oklahoma tax professionals at Travis W. Watkins, PC today for a free consultation at 800-721-7054!