Quarterly Taxes with business that started mid-year

[agd07]

I have a salaried job, but I also pick up relief shifts independently as an independent contractor. I just started the independent contractor portion in July 2023. I've seen differing things online regarding how to start paying estimated taxes when you start your business mid-fiscal year. Could you clarify how I should start this process?

[conniem123]

Hi agd07!

Thank you for your question today!

When you are self-employed, you may choose to make estimated tax payments.  These estimated tax payments are the same concept as your tax withholdings from your salaried job.  In the same way that your withholdings offset tax when you file your tax return, estimated tax payments would also offset tax when you file your tax return.

Depending on your tax situation, you may not need to make estimated tax payments.  For example, if you typically have more withholdings than tax on your tax return, and receive a refund.  Those "extra" withholdings from your salaried job will be used to offset tax when you file your tax return.  Some taxpayers prefer to increase their withholdings on their salaried job rather then make estimated tax payments.

Here is a great resource about estimated taxes, 

• Estimated Taxes:  How to Determine What to Pay and When

I hope this information is helpful.  Have a great day!

Connie