Business & farm

Hello @RedBen!

Congratulations on your first year in business! I will respond to your questions in the order asked: 

• You may be subject to penalties for the first two missed quarterly estimated payments. The amount you owe increases the longer you go without payment. The failure to pay penalty is 0.5% of the unpaid taxes for each month or part of a month you don't pay, up to 25% of your unpaid taxes, so if you make the  payments now the penalties might not be too bad, depending on your income during the first two quarters. 
• You can make your first two payments online at IRS Direct Pay. Choose Estimated Tax as the Reason for Payment, Apply payment to 1040 ES for Tax Period 2024. The sooner you make these payments, the lower the penalty amounts will be.
• You will calculate your net profit for the quarter (income less expenses) and pay the IRS 15.3% of the net amount to cover the Social Security and Medicare portion of the self employment tax, but don't forget about the federal income tax piece as well. You will add an additional 10% to the 15.3% amount as a federal estimated tax payment if you are in the 10% tax bracket, an additional 12% if you are in the 12% tax bracket, and so forth. Here is a link to the 2024 tax brackets based on your taxable income to help you to calculate your estimated payments: 2024 tax brackets 
• The TurboTax software will generate 4 equal quarterly tax payment vouchers for the following year based on your income during the current year, but these amounts are not set in stone (that's why they are called estimated tax payments). Using the method above will probably result in 4 varied amounts but will definitely cover your tax liability for each quarter. 
• And as for your last question, yes, you will want to make estimated state tax payments as well. Since the AZ income tax rate for 2024 is 2.5%, you will send 2.5% of your net earnings each quarter to the state of AZ at this link: AZ Individual or Small Business Tax Payments  Be sure to choose Small Business Payment Type140ES-SBI: Estimated Payments

Here is a link to an IRS resource which covers any additional questions that you may have about estimated taxes: Pay as you go, so you won't owe

If this post answers your questions, please give me a thumbs up! Thanks for reaching out!