I Didn't Know Anything About Quarterly Taxes For Self Employment

[bozley2016]

I have a side gig but had no idea about paying quarterly on the income, I thought it was all when I filed my taxes.  I have no idea about how to do this, how much, etc.

[Katie-P]

Hi @bozley2016,

Thanks for your question. I'd be happy to help!

Paying quarterly estimated taxes does catch people by surprise. The IRS is a pay-as-you-go system, meaning they want their tax money as you earn in throughout the year. When you are an employee, that is normally taken care of by way of your federal and, if applicable, your state tax withholdings. When people start a side job, there is not any withholding on their net income, so that is why self-employed taxpayers pay in these quarterly estimated tax payments. Then, when they file their income tax return, they make sure to include in their tax return that they made these payments. 

I am providing several links below to various resources that will help you better understand what to do:

• https://turbotax.intuit.com/tax-tools/
• https://turbotax.intuit.com/tax-tools/expense-monitor/
• https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-guide-to-paying-quarterly-taxes/L6p8C53...
• https://ttlc.intuit.com/turbotax-support/en-us/help-article/estimated-taxes/make-estimated-tax-payme...
• https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-payments/enter-estimated-tax-payment...

I hope this information is helpful, @bozley2016 ! I'll stay tuned in case you have a follow-up question. Thanks again!

[MelanieCPA]

Hi @bozley2016 

Congrats on starting your own business!  Yes, being self employed or an independent contractor gives you the satisfaction of being your own boss but also comes with the responsibility of making the estimated tax payments. 

To determine the amount of quarterly estimated taxes you should pay may be a little tricky the first year.  Here is a tool to help you:

Estimated Payments Calculator 

Once you have your tax return prepared for 2023, TurboTax will help you to estimate future taxes based on your 2022 income.  Keep in mind that it is your responsibility to make adjustments if you have an increase from the estimates that TurboTax computes.  Consider evaluating your income every quarter to make sure you are on track to have your best estimate of taxes owed during the year.

You can make and track your estimated tax payments on the IRS website by creating an account at 

IRS Tax Payments 

There are lots of great resources out there for the self employed.  Here is one more link to a TurboTax article for you to review. 

Estimated Taxes FAQ 

Please reach out with additional questions!

Melanie, CPA