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Level 1

Independent Contractor

Hi,

 

in 2019 i worked from 01/01/2019 till 11/07/2019 in a company and received a regular paycheck.

My last day with this company was 11/07/2019 and started working as an independent contractor from  11/08/2019 until the end of the year. and made a total amount of $17,460.

I read that I have to pay estimated taxes on this by January 15, 2020 but I don’t know if that is true and how much I have to pay. Could you please help to clarify because if I have to pay then I need to pay soon. 

 

Thank you very much!

1 Best answer

Accepted Solutions
Level 15

Independent Contractor

Your 4th quarter tax payment on your business/self-employment income is due to the IRS ***TODAY*** (Jan 15, 2020). Go online to www.irs.gov/payments and pay a minimum of 20% of your gross business earnings to the IRS *RIGHT* *NOW* *AT* *THIS* *VERY* *INSTANT* *IN* *TIME* so that you are not late.  That would be $3,500 you need to pay the IRS immediately.

After you pay, *PRINT YOUR RECEIPT* as you will need that information when you complete your personal 1040 tax return. You will report all business income on SCH C as a physical part of your 1040 personal tax return and it *DOES* *NOT* *MATTER* if you are married and filing a joint return. If you have questions on that, I suggest we deal with them later. But for now, pay your quarterly taxe *IMMEDIATELY* if not sooner, and get it done.

Note also that if your state taxes personal income, then you need to pay your 4th quarter estimated taxes to your state too. How you do that, depends on the state. Not all states offer the ability to pay online. So check your state's department of taxation website or department of revenue website and see how to pay quarterly taxes to your state and get it done yesterday, if not sooner.

As to how much to send the state, you should basically send the state the same percentage of your gross business income, that is equal to the highest rate they tax personal income at. For example, Vermont's highest tax rate on personal income is 8.75%. Additionally, you can pay Vermont state taxes online at https://www.myvtax.vermont.gov/_/

 

 

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4 Replies
Level 15

Independent Contractor

Your 4th quarter tax payment on your business/self-employment income is due to the IRS ***TODAY*** (Jan 15, 2020). Go online to www.irs.gov/payments and pay a minimum of 20% of your gross business earnings to the IRS *RIGHT* *NOW* *AT* *THIS* *VERY* *INSTANT* *IN* *TIME* so that you are not late.  That would be $3,500 you need to pay the IRS immediately.

After you pay, *PRINT YOUR RECEIPT* as you will need that information when you complete your personal 1040 tax return. You will report all business income on SCH C as a physical part of your 1040 personal tax return and it *DOES* *NOT* *MATTER* if you are married and filing a joint return. If you have questions on that, I suggest we deal with them later. But for now, pay your quarterly taxe *IMMEDIATELY* if not sooner, and get it done.

Note also that if your state taxes personal income, then you need to pay your 4th quarter estimated taxes to your state too. How you do that, depends on the state. Not all states offer the ability to pay online. So check your state's department of taxation website or department of revenue website and see how to pay quarterly taxes to your state and get it done yesterday, if not sooner.

As to how much to send the state, you should basically send the state the same percentage of your gross business income, that is equal to the highest rate they tax personal income at. For example, Vermont's highest tax rate on personal income is 8.75%. Additionally, you can pay Vermont state taxes online at https://www.myvtax.vermont.gov/_/

 

 

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Level 10

Independent Contractor

Forget estimates. It is too late. Do a return to file by Jan 31. If you do not have full info on expenses guess low. Uses pay stub info if you do not have the W2. Pay and do an amended return when TT has issued the 1040X. Do the same for the state.

Level 1

Independent Contractor

Hi Carl, unfortunately, I missed your reply and went with the other suggestion to file my tax return by 1/31. However, just finished it but TT does not let me e-file or print it because there is 1 form not released by the IRS. It is planned to be released on 2/5. What do I do now?

Employee Tax Expert

Independent Contractor

Is it possible to delete the form, file by January 31 and then amend in a few weeks? 

 

Or is the missing form essential to the bottom line of your tax return?

 

This information comes from IRS publication 509 page 3

 

Individuals - Make a payment of your estimated tax for 2019 if you didn't pay your income tax for the year through withholding (or didn't pay in enough tax that way). Use Form 1040-ES. This is the final installment date for 2019 estimated tax payments. However, you don't have to make this payment if you file your 2019 return (Form 1040 or Form 1040-SR) and pay any tax due by January 31, 2020.

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