Contractor + estimated taxes penalty

[leilabarzegar]

Hello - 2021 was the first year that I started working as an independent contractor. I misunderstood the requirements for estimated quarterly tax payments and just paid one large sum prior to the 9/15 deadline. Do you have a sense of how common penalties for late estimated payments are? 

Thank you!

[leilabarzegar]

quick clarification to my question - Do you have a sense of how common penalties for late estimated payments are? Or whether there is a formula/percentage used to determine the penalty?

[STaxLady]

Hello leilabarzegar,

Here are some links to more information regarding estimated payments, and penalties for late payment. One is from TurboTax and I think it addresses your question :

https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-how-to-determine-what-to-p... 

As a follow up, here is a link to the instructions for form 2210, which is the form that is used to determine the amount of penalty, in the event that there is a penalty. 

https://www.irs.gov/pub/irs-pdf/i2210.pdf 

If you have any further questions after reviewing this information, don't hesitate to reach out with details more specific to your situation.

Best regards,

STaxLady