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Tax Debt Help for the Self-Employed. Self-employment Tax Awareness Self-employed people do not have Social Security, or Medicare taxes withheld from their paychecks. Instead, they are responsible for making these payments through the self-employment tax. This tax is in addition to regular income tax, and it can create a substantial tax burden for people in certain tax brackets. If self-employed people do not pay quarterly estimated taxes and reserve around 30 percent of their self-employment income for taxes, they may be hit with tax bills in the thousands along with penalties and fees. Even with careful planning, self-employed people can be hit with large, unexpected tax bills. Options for Handling Large Tax Bills Self-employed people who receive large tax bills can handle them in a few ways. Taxpayers can request installment plans from the IRS. If they have enough in savings, they can pay the bill in full. People may also pay their tax bills with credit cards or by borrowing money from their family members. If people are unable to pay their tax debts, they might make offers in compromise. These are offers to settle the tax debt for less than the full amounts that are owed. Some people who are not financially able to pay their tax debts may also have them declared to be currently uncollectible. When this occurs, the IRS will continue to look at their finances for 10 years to see if their financial situations have improved. If they have not, the tax debt will be forgiven.