New to quarterly taxes, how do I get caught up?

[willv]

Hi experts,

My apologies in advance for the dumb question. After ending my W2 employment last year, I recently started freelance work in January of this year. As such, I was not even aware that I had to pay quarterly taxes until I received an invite to this event.

Now that I learned of this, I also realize that I am potentially behind on payments since 2 quarters have already gone by. I've read conflicting information online regarding whether first-timers have to pay quarterly taxes -- some resources say that this has to be based off your previous year tax filing, whereas other resources say that last year data is irrelevant.

So I basically have 2 questions:

1. Given that this is my first time as a freelancer, and thus have no previous year freelance work income to base anything from, am I responsible for quarterly taxes this year or do my obligations start next year?

2. If I am responsible for payments this year, is there any way to avoid penalties for my 2 previous missed payments? In other words, can I pay my entire 2023 estimated taxes during the Q3 date to avoid penalties?

Many thanks, all!

[CatherineR · Accepted solution]

Congrads on the self employment work WillV!

It's not too late to start making those estimated tax payments for your self employment income.  You could catch up now by making a catch up payment at IRS.gov under the "make a payment" button.  Make sure to label as 2023 estimated taxes.  Payments made now will avoid a large balance due at year end and possible penalties and interest charges on top of the balance due amount.  

Here is a great IRS resource of FAQs regarding estimated taxes:

IRS FAQs on estimated taxes 

The penalty will be determined at year end and depends on last years tax liability and how much and when 2023 estimates are paid in.  The sooner you make the payments the better outcome.  

Good luck with our self employment.