What are estimated payments based on? Current income or last year's income?

[feliceandrea-gma]

I was told that I should make quarterly estimated payments to the IRS on self-employment income throughout 2024 based on what I earned in 2023. Then if I end up earning more in 2024 I can pay the difference when I file in April. Is that correct?

What about for California?

[Bsch4477]

That’s correct. You will avoid a penalty by doing that even if you owe money. Same with California. 

[MirthaG]

You can base your estimated tax payments on total estimated tax for this year, you then deduct amount that is withheld  and you will  then compute the amount that must be paid through estimates 2024.  The estimated taxes are payable in April 15, June 15th, September 15th and January 15th 2025.  The IRS allows taxpayers several exceptions to the failure to pay estimated taxes and the accompanying penalty.  One of the exceptions is that you can pay during 2024 though estimates and withholding an amount equal to the prior year tax (2023). You can the pay the balance due when you file on April 15th, 2025.

[MirthaG]

Same for California.