How do I make estimated quarterly tax payments based on my actual income? My income is unpredictable and I don't want to under pay or over pay.

[Jackstar221]

Hi,

Here is an IRS link for IRS Estimated Taxes 

Within that link, is the Tax Withholding Estimator 

You can register to pay estimated taxes online at EFTPS 

You also also mail in a payment, or use your online IRS account IRS Form 1040-V 

[fanfare]

IRS wants you to over-estimate your tax.

If you underestimate you are likely to get underwithholding penalty interest charged on the shortfall.

@sakaenyc 

[JandKit]

Hi sakaenyc!

This is an interesting question...for sure. Let me agree with those before me... If you receive all of your income at once, it will be quite easy to determine the estimated tax.   Here is the formula:

                                              Income received - expenses or deductions = Profit

                                                                                then

                                              Self-employment Taxes =   Profit X 0.1412955

If you do not know what the exact amount of earnings will be, a different approach must be taken.

That approach will involve estimating the income you expect to earn for the year minus expenses. Then,

use the Self-employment Tax formular to calculate the taxes quarterly. The payment made will then reflect how accurate your calculations of income and expenses were.

This may help to clarify the approach for you!