Self employed

LoraineG · ‎August 30, 2023

IRS wants you to pay estimated tax payments if you expect to owe $1,000 or more in taxes when you file. Be mindful that when they say the term "taxes owed", they are referring to your whole tax liability (see below).

If you expect that your line 24 is going to be over $1,000, then you must make estimated tax payments. The payments are made in April 15, June 15, September 15, and January 15 for the current tax year. If for the first 2 quarters you didn't have that expected liability, then they expect you to start the estimated tax payments as soon as your tax liability increases. Also make adjustments as the year goes by if needed.

For example, in April 30th, you weren't expecting to have any tax liability because you were unemployed. In June 1st, you started your business and you expect to pay about $1,200 in taxes. Then you have to make a $400 payment for the next 3 quarters.

For more information you can check this information from the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

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