How do I file taxes on a quarterly basis?

[DoninGA]

You can make estimated tax payments using the IRS payment website - https://www.irs.gov/payments

[rjs]

You don't file a tax return every quarter. You just make quarterly payments of estimated tax. You file one tax return at the end of the year. The estimated tax payments that you make during the year are applied towards the total tax for the year on your tax return.

You can make estimated tax payments online using Direct Pay on the IRS web site. Make sure you select the correct year. If you want to make estimated tax payments by mailing a check, use Form 1040-ES for the applicable year.

For details about estimated tax, see Chapter 2 of IRS Publication 505.

[Carl]

Is this for a business you own? If so, what kind of business? LLC? S-Corp? C-Corp? Other?

If you do own a business, does the business have employees? If yes, then you may be required to file a Form 941- Employer's Quarterly Federal Tax Return. The form is at https://www.irs.gov/pub/irs-pdf/f941.pdf

It's labeled as a "tax return", but it's more of a quarterly report of employee wages and taxes withheld along with the employer submission of those tax payments made on behalf of your employees.

[TomD8]

Tip: if you make estimated tax payments, keep your receipts.  If you do your final tax return with TurboTax, you'll have to enter the date and amount of each estimated tax payment.

Also, if you live in a state with an income tax, you may also have to make state estimated tax payments.

[sandman14]

Very helpful. I have a commission-based job so my income varies from year to year so withholding additional income varies as well. I was thinking about paying quarterly.

[sandman14]

This was very helpful! I don't own a business but have a commission-based job, which results in having fluctuating income year over year and it's hard to withhold the right amount per paycheck with this variability. Do you think paying quarterly would be helpful?

[Carl]

Do you have any idea as to why commissions are not included in your W-2?

[sandman14]

The commissions are included in my W-2. But by the end of the year, it varies how much I make To solve not owing a decent amount of money when I file my taxes, is the best answer to constantly tweak my additional withholding amount?

[TomD8]

If your commissions are included in your W-2, your withholdings each pay period should vary automatically according to the pay period's gross amount.

[Carl]

If included in the W-2, are you saying it's included in box 1 of the W_2? If not, then where on the W-2? I would expect it to be included in box 1 since that box label includes the words "other compensation" in it.

If included in box 1, then taxes are being withheld on the additional money, based on the information you provided to the employer on the W-4. But you have several choices on what you can do for 2023 and beyond.

1. Submit a new W-4 to your employer and lower the number of exemptions so the employer will withhold more from each paycheck. There's also a place on the W-4 where you can have an additional amount withheld from each paycheck, be it a fixed dollar amount or a percentage of each paycheck.

2. Make at least quarterly tax payments yourself, directly to the IRS. (The state too, if applicable to you). If you send the IRS 20% of your gross untaxed earnings each quarter, then come tax filing time if it doesn't result in a refund, chances are good that any additional tax you owe will be well under $1000. This will avoid the underpayment or under-withholding penalty, if what you owe is less than $1K.

Now I'm self-employed. So I do option 2 above and send the IRS 20% of my gross earnings each quarter. For me come tax filing time, I am always within $1K of my tax liability and have been for the last 15 plus years. For the last two years, I ended up owing the IRS additional money and what I owed each of those years was actually less than $500. So I just wrote the check and was done with it.

In prior years where I got a refund, it's always been somewhere between $500 and $1000, and for me, the lower the refund the better. Means I'm not letting Uncle Sam use to much my money interest free, before they have to pay it back to me.