Business FinancesQuestion 1188 of 1605
Estimated quarterly tax payments are generally required for a self-employed contractor because:
a.The CSLB collects income tax
b.No employer withholds tax from his income, so he must prepay throughout the year
c.Employees withhold his taxes for him
d.Sales tax is due quarterly only
Explanation
A self-employed contractor has no employer withholding taxes from a paycheck, so the IRS and California require estimated quarterly payments of income and self-employment tax to avoid underpayment penalties.
Practice all 1605 questions free — no signup required.
Related questions on this topic
- On a balance sheet, which is a CURRENT liability?
- A contractor's net profit is $48,000 on revenue of $600,000. What is the net profit margin?
- Return on the owner's investment is improved when a contractor:
- Payroll taxes an EMPLOYER contractor must pay (matching or employer-only) include:
- A California contractor who buys materials out of state for use on a California job without paying sales tax generally owes:
- A contractor's monthly fixed costs are $8,000. His average job produces $500 contribution margin. How many jobs per month are needed to break even?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)