topic How much to pay for estimated tax in Get your taxes done using TurboTax

How much to pay for estimated tax

peter101611 — Fri, 31 Jul 2020 15:15:46 GMT

I'm currently self employed through instacart and doordash and I know I am supposed to make estimated quarterly tax payments. This is my first year working through these and I have no idea how much I am supposed to pay for estimated quarterly taxes. I've already missed the first 2 deadlines and would like to make the next 2 on time. However, I have no idea how much I should pay. I see that I can make these payments directly on the IRS website. Is it okay to make a guess for payments? Or does it have to be exact?

Re: How much to pay for estimated tax

DoninGA — Fri, 31 Jul 2020 15:19:21 GMT

No, it does not have to be exact. Rule of thumb is to pay 20% of your estimated self-employment income after expenses as an estimated tax payment.

Re: How much to pay for estimated tax

peter101611 — Fri, 31 Jul 2020 15:23:56 GMT

Would that rule of thumb apply to the total of all 4 estimated quarterly payments? For example, if I made $10,000, 20% of that would be $2,000. So should each of my estimated quarterly tax payments be $500?

Re: How much to pay for estimated tax

DoninGA — Fri, 31 Jul 2020 15:31:06 GMT

@peter101611 wrote:

Would that rule of thumb apply to the total of all 4 estimated quarterly payments? For example, if I made $10,000, 20% of that would be $2,000. So should each of my estimated quarterly tax payments be $500?

It would if you know that your annual self-employment income after expenses was $10,000.

However, you should probably use the estimated taxes worksheet on Form 1040-ES to calculate the taxes.

Go to this IRS website for a Form 1040-ES and use the worksheet with the instructions starting on page 5 - https://www.irs.gov/pub/irs-pdf/f1040es.pdf#page=5