Self employed

Hi Cbergthold,

To reply, you should project the tax year 2021 tax liability.  TurboTax Income Tax Calculator 2021:

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

Or TurboTax Online 2021 program will be available by end of December 2021, that you can log onto for projection purpose.

If you have a balance due, there are two possibilities:

(1) If you do not want to incur any underpayment penalty, but do not mind to have a balance due, please make sure you paid at least 100% of 2020 tax liability for tax year 2021.

Form 1040-ES 2021, page 1 has general rules for making estimated tax payments.

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

(2) If you do not like to have a large balance due at April 2022 tax filing time and cash flow permits,  please pay some estimated tax payment on or before 1/18/2022.

Direct Pay With Bank Account

https://www.irs.gov/payments/direct-pay

Form 1040-ES 2021 Estimated Tax, vouchers on last pages

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

The above applies to your individual State requirement as well.

For tax year 2021, child tax credit is a refundable credit. Depending on qualification, there is a finite amount for each qualifying child. If you are receiving some advanced child tax credit payments during 2021, that means you will have less credit available to offset tax liability at tax filing time, which results in less tax refund or more balance due.

Hope this helps. Thank you.