If you are self-employed then you are required to pay your federal taxes quarterly. That is what the 1099-ES vouchers are for. If you pay them all at once for the year (April 15th) you are subject to penalities....I learned the hard way. It cost me about $500 MORE than what I would have had to pay had I done them quarterly. And that was my first year in the business and my net income was really small potatos to begin with. The last three years I have been paying them quarterly...and I must admit, it sure is easier to come up with the payments in that fashion than it is to wait and try to come up with a whole years worth...right at the begining of the season. The self-employment tax is your social security payment. If you do not pay taxes to the US Dept. of Treasury (IRS)....then you are not accrueing any Social Security. Do not confuse Social Security with welfare. One MUST pay into it to get any back in the future. In the case of NOT paying Federal Income Tax I hope that one is investing in a retirement plan of some kind...or saving that cash like crazy (but it wont keep up with inflation rate at the LOW interest rates savings accounts are paying out these days). And forget buying anything 'big ticket' that needs financing...like a house...or applying for a small business loan at the bank. They want PROOF of income...in the form of 1040's for three straight years (in most cases). They could care less if you are sitting on a pile of cash............ Don't muck around with the IRS. When you do eventually get caught the fines and penelties will KILL you! There was a roofer that got busted here a year or two ago...did not pay in for 5 years before they caught up to him. To make matters worse, he was paying his helpers cash 'under the table' too. Once the IRS figured his back taxes, his employees back taxes, the fines, the penelties, and he paid off his lawyer for keeping him out of prison.........he could have bought a decent sized house. No sheet! Cost him close to $250,000 smackers. He wishes he had just payed his taxes like he was supposed too (estimated at around $40,000-$50,000).