I left an employer mid 2016 and will receive a W-2 from them. In early September 2016 I began working as an independent contractor. Do I need to pay estimated taxes on my independent contractor earnings for the September through December earnings by Jan 15 of 2017, or can that be included on my full year taxes filed by April 15?
The obligation to pay Estimated Tax is dependent on whether or not you will have paid, through withholdings, at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. A larger percentage of 100% of current year tax is required for those whose Adjusted Gross Income is $150,000 or more.
So, if all your withholding tax sums to either the 90% of this year's obligation or 100% of what you actually paid in the prior year, you are not obligated to make an Estimated Tax payment.
If you have to do so, you should make that payment by January 15th so as to meet one of those two percentages. The April 15th payment amount is intended for any obligation over that 90%, as above.
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