Hello,
I am a freelance graphic designer. My yearly income varies vastly year to year, and I really never know how much I'm going to earn. Is it okay for me to continue to pay my taxes only at the end of the year, or do I need to be paying taxes quarterly?
Thanks!
You'll need to sign in or create an account to connect with an expert.
Hi @Ewaters17 here is a more detailed explanation to help determine if you should or should not pay quarterly.
It depends. The general rule is that you must pay as you go. Meaning that when you file your tax return, if you haven't paid enough taxes through withholdings or estimated tax payments then you might owe an underpayment penalty.
To determine whether you need to make quarterly estimates, answer these questions:
If you answered "no" to all of these questions, you must make estimated tax payments using Form 1040-ES. To avoid a penalty, your total tax payments (estimated taxes plus withholding) during the year must satisfy one of the requirements above.
If you only pay at the end of the year on your tax return you may owe a penalty for not paying in during the year. You should still send in some quarterly. You will get a refund if you over estimate the amount.
You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- 2. You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).
Thank you! How would one go about sending in these quarterly payments. Do you do it through a software like turbotax or quickbooks? or you have to send it in directly?
How to make the Estimated payments
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-make-estimated-tax-payments/00/25875
Here are the blank Estimates and instructions…..
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
The 1040ES quarterly estimates are due April 15, 2021, June 15, Sept 15 and Jan 18, 2022. Your state will also have their own estimate forms.
Or you can pay directly on the IRS website https://www.irs.gov/payments
Be sure to pick the right kind of payment and year.....2021 Estimate
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
NH32
Level 1
smbran240
Level 1
Jonathan_H
Level 2
bovine19440
Level 2
yenomjim
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.