Hi @cmallow17 Thanks for your question!
Will all of your income be 1099 income from that point? Your quarterly taxes that are required are based off what you will owe on tax day in 2024. That can be a difficult number to calculate today in 2023 though. So the IRS has 2 methods to calculate this amount to avoid being charged an underpayment penalty. You either pay 90% of your 2023 taxes (which is our number that is hard to calculate), or 100% of your 2022 tax due if your income is less than 150,000. If it's more than 150,000 this changes to 110%. Your 2022 tax due is line 24 of your 2022 form 1040.
Once you have found what 100% of your 2022 tax due is subtract out any income tax withheld from any W2 wages you received. If you're about to start as a 1099 contractor your estimated payment due dates are September 15, 2023 and January 15, 2024. So 2 due dates for this year and 4 next year. So that's 100% (or 110% of your total tax for 2022 and subtract out any W2 withholdings and divide by the 2 payments. That's roughly what you need to pay in estimates.
So total tax from 2022 tax return minus any W2 income tax withholdings in 2023 divided by the number of payments = your quarterly payment.
The IRS has a helpful tool here IRS estimated tax tool
It's a bit of a guessing game for some pieces this year. The good news is next year TurobTax will create estimated payment vouchers for you that avoids any underpayment penalty. The good news is the underpayment penalty is really interest and is a small amount so even if you're off a little, it shouldn't be a large number.
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