Simple answer: No. It is not mandatory to pay quarterly taxes.
But, you want to make a payment to avoid an underpayment penalty. You should make estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- 2. You expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your current year’s tax return, or 100% of the tax shown on your prior year’s tax return. (110% if your income will be more than $150K) . Your prior year tax return must cover all 12 months.
If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”. You might be able to increase your W2 withholding, at your regular job, to account for the extra income.
TurboTax (TT) can prepare the quarterly payment vouchers. In your 2020 software, enter at:
Federal Taxes or Personal (H&B version)
-Other Tax Situations
-Other Tax Forms
-Form W-4 and Estimated Taxes - Click the Start or Update button
On the next screen answer No to the W-4 question
