Yes you should pay estimated taxes. Penalties may be assessed and interest is accrued daily.
Yes you can make estimated tax payment online.
If you make $20K you would be in the 10% tax bracket. If single you would get a $12,400 standard deduction.
Yielding a tax of $960.
However, if you are self employed you will have to pay self-employment tax (Social Security & Medicare). This is an additional 15.3% on the entire $20K.
That would be an additional tax of $3,060.
Coming to a total tax of $4,020
The underpayment penalty may apply if :
- The amount of tax you paid during the tax year is less than 90% of the tax that you owed for the current year.
- Example: in 2020 you had $8,500 withheld in taxes. Your 2020 tax return shows that you owe $10,000. That is less than 90% and there will be a penalty.
- The amount you paid during the tax year didn’t at least equal 100% of your taxes owed the prior year.
- Example: Your 2019 tax return showed that you had $9,000 as a total tax obligation. You paid $9,001 in withholdings in 2020. Your 2020 tax bill comes in at $20,000. There is no penalty because you paid 100% of the 2019 tax.
- The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000, after subtracting withholdings and refundable credits.
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