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I have been working as an IC on 1099 since March and haven't paid any quarterly taxes yet. When should I do so? How much should I estimate?
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Hi Nafrei,
Thanks for participating today! The next estimated tax payment date is 9/15/2023.
To calculate your estimated taxes, you will add up your total tax liability for the current year—including self-employment tax, individual income tax, and any other taxes—and divide that number by four. Since the first 2 payment deadlines have lapsed, you can divide the tax by 2 and pay 50% 9/15/2023 and 50% 1/16/2024.
Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
You don’t have to pay estimated tax for the current year if you meet all three of the following conditions.
There is a safe harbor rule for estimated tax that has three components:
Generally, an underpayment penalty can be avoided if you use the safe harbor rule for payments described below. The IRS will not charge you an underpayment penalty if:
This rule is altered slightly for high-income taxpayers. If the Adjusted Gross Income on your previous year’s return is over $150,000 (over $75,000 if you are married filing separately), you must pay the lower of 90% of the tax shown on the current year’s return or 110% of the tax shown on the return for the previous year.
Your state will also have estimated tax payment rules that may differ from the federal rules.
For some background on estimated tax payments read this article:
IRS Estimated Tax for Individuals
For detailed instructions to start paying estimated tax payments, see the instructions:
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