Hi jobu2006,
Yes, you should begin filing and paying quarterly estimated taxes because of your self-employment status and taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax.
If you don’t pay enough tax through withholding and estimated tax payments, you may be charged a penalty. You also may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return.
Who Must Pay Estimated Tax
Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when their return is filed.
https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
How should I figure what I owe?
You need to come up with a good estimate of the income and deductions you will report on your federal tax return.
You can use TurboTax tax preparation software to do the calculations for you, or get a copy of the worksheet accompanying Form 1040-ES and work your way through it. Either way, you'll need some items so you can plan what your estimated tax payments should be:
- Your previous year's return. Use your previous year's federal tax return as a check to make sure you include all the income and deductions you expect to take on your current year's tax return. You should also look at the total tax you paid if you are going to base your estimated tax payments on 100 or 110 percent of your previous year's taxes.
- Your record of any estimated tax payments you've already made for the year. You need to take those payments into account when you determine how much tax you still owe, so have your check register handy to look up the amounts and the dates you paid.
https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-how-to-determine-what-to-p...
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