Congrats on more income!
If you're making more income than you previous forecast, you need to true up the forecast. You can use TurboTax Calculator to assist in that process. The IRS is a pay as you go system. So, calculate the year to date amount that you'll owe and put in the additional to true it up, with this quarter's payment. Don't delay on the true up.
There are safe harbor rules that may preclude you from owing a penalty. In general, taxpayers don’t have to pay a penalty if they meet any of these conditions:
- They owe less than $1,000 in tax with their tax return.
- Throughout the year, they paid the smaller of these two amounts:
- at least 90 percent (however, see 2018 Penalty Relief, below) of the tax for the current year
- 100 percent of the tax shown on their tax return for the prior year – this can increase to 110 percent based on adjusted gross income
However, if you do get caught short, If your income varied during the year because, for example if the increased income came late in the year, , you may be able to lower or eliminate the amount of one or more required installments by using the annualized income installment method. You will be able to use IRS Form 2210, Schedule AI to figure the required installments to enter on Form 2210, Part III, line 10.
TurboTax has some great self employed calculators that can help with that.
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