Conclusion: If you didn't notice, the main takeaway here is that taxes are usually handled one of two ways. Income that is earned from an employer (hourly, salary, tipped, commission) has taxes automatically withheld before you receive your paycheck. This ensures simplicity and relieves you of responsibility. Income that is earned on your own (business, freelance, and unearned income) requires you to manually pay taxes. This structure increases your responsibilities. You must plan accordingly and maintain an accurate tracking of your income throughout the year in order to avoid penalties and legal issues.
Good to know: It's safe to assume that any money you make will usually require some type of tax to be paid on it.
