Quarterly Taxes

[aviaragirl]

• Why do I have to pay quarterly taxes and how can I avoid it? 
• How much do I need to pay in quarterly estimated taxes?

[LoraineG]

If you are expecting to owe tax of $1,000 or more, it is required by law that you must pay estimated tax payments.  The other way is to have withholding taken out of your paycheck.  However, when you are self-employed, you can't take a salary (just distributions, which are not taxable, but you can't take as a deduction either), so you can't have the taxes withheld that way.  The IRS (and the states) expect you to prepay your taxes.  Failure to do so, will incur in additional interest and penalties.

To know the amount you must pay, you need to know how much you are making.  You pay taxes over the net profit, not the gross (if you have a business or self-employed).  You can use a calculator like the Self-Employed Tax Calculator found here.