I was working as 1099 contact January through June of this year and am now W-2. I had been sending in my estimated taxes assuming I'd be 1099 all year (so a large amount). For the next estimated payment in September, can I decrease the payment drastically to just reflect the month or so I was still 1099 in the 3rd quarter, and then not pay a fourth and final since I shouldn't have additional 1099 income?
Yes, you can do so. You would have to recalculate for each quarter and take into account what you already paid for the previous quarter(s). Generally, taxpayers should make estimated tax payments in four equal amounts to avoid a penalty. However, if you receive income unevenly during the year, you may be able to vary the amounts of the payments to avoid or lower the penalty by using the annualized installment method. You will need to use IRS Form 2210 to show that your estimated tax payment is due because of income during a specific time of the year. If not, the IRS assumes that you had the income throughout the year and simply underpaid your estimated tax. This could lead to a penalty. https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-common-questions/L1luHqVdl#GoTo-What-if-my-income-has-jumped-
@sajero2 Thanks for the question!!