@Bryanlafaurie Thanks for the question!! Congrats on being your own boss!
In the United States, we have a “pay as you go” tax system. That means that the government expects to receive most of your taxes throughout the year. Because of this, employees have a certain amount of taxes automatically withheld from their paychecks.
On the other hand, if you are self-employed as a freelancer, contractor or home-based entrepreneur, you most likely don’t have taxes withheld from your pay throughout the year and are instead subject to quarterly estimated taxes. In general, you are expected to pay estimated taxes if you expect to owe $1,000 or more annually for your taxes.
The 2023 quarterly estimated tax deadlines are:
- 2023 1st Quarter (January 1 – Mar 31, 2023): April 18, 2023
- 2023 2nd Quarter (April 1 – May 31): June 15, 2023
- 2023 3rd Quarter (June 1 – August 31): September 15, 2023
- 2023 4th Quarter (September 1 – December 31): January 16, 2024
So for Self-employed, paying quarterly taxes is highly recommended to avoid underpayment penalties when you file next year. You can pay estimated taxes at the IRS website: https://www.irs.gov/payments
It is good that you are keeping good records for all the income & expenses. You being in a cash business, does not make you more probable for IRS AUDIT!! As long as you have excellent records, receipts etc you need not worry.
Estimated Taxes: How to Determine What to Pay and When
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