Self employed question very

[cassieerne]

Hi-  I'm self employed as a travel agent.  I have a few questions for my schedule C.  Would it be worth it to set up a quarterly payment going forward to pay my taxes that I owe?  If so how do I go about doing that?

I receive 1099 income only so I write off my trips that I take for education purposes, etc.  Are apps like Everlance acceptable if ever audited by the IRS?  I've been using those to analyze my credit card for any write offs, etc. and it appears that those are acceptable to take place instead of saving 1000's of receipts.

Thanks!

[VolvoGirl]

Yes you should send in estimated payments so you don't end up owing too much or get hit with a penalty. 

You must make quarterly 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. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year you start with your current return, (if you can't get back into your return try this, On the Tax Timeline page you have to select Add A State to get back into your return). But be careful not to change anything on your real return.

Go to Federal Taxes or Personal (Home&Business version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

Say No to W4. When you get to the W4 and Estimated Taxes section, say you want to adjust your income to go though all the screens.

TIP - If you didn't owe or missed making the prior quarterly estimated payments and need to just calculate starting now, you can go though the Estimated Taxes section and just put $1 (one dollar) in for the quarters you missed. Then it will only figure the current and remaining quarters.

The 1040ES quarterly estimates are due April 18, June 15, Sept 15 and Jan 16, 2024. Your state will also have their own estimate forms.

Here are the blank Estimates and instructions…..
https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Or you can pay on the IRS website. Be sure to pick 2023 1040ES payment
https://www.irs.gov/payments

[JBedford]

Hi, @cassieerne , thanks for the questions! 

1) Since no tax is withheld from self-employment income, you should probably consider making quarterly estimated tax payments. You can do so using the Electronic Federal Tax Payment System. 

2) If you're asking can you use Everlance to substantiate business expenses, it's hard to say for sure. This article discussed the IRS' Burden of Proof for business expenses. I would say that it's preferable to have "too much" proof vs. not enough. 

Hope this helps, please let me know if not!