Pay taxes if you must

The way you structure your business will provide guidance as to how soon you need to begin paying taxes on your earnings. Though there can be twists, the general rule is that if you operate as a sole proprietorship, you dont need to begin immediately paying taxes. Going by the letter of the law, if you make more than the de minimus amount of $400, youre supposed to file taxes quarterly, says Williams. But there are no penalties if during the year you shift from being an employee to being self-employed and you dont make quarterly tax payments.Thats not true if youve formed a corporate entity. Those entities must begin filing taxes on income as they earn it, says Williams. If you as an entity make money, you have to report it quarterly.