How can FlyFin help me with my quarterly taxes?

The U.S. system works on a pay-as-you-go basis, which means that as you earn money, you must pay taxes along the way. Waiting till the end of the year to cut a cheque to Uncle Sam isn’t a good idea since he expects you to pay your taxes regularly throughout the year.

The taxation process is a lot simpler for W2 employees. As an employee, your employer withholds money from your paycheck to pay your taxes. This money is taken out of your paycheck and remitted to the government without you having to do anything.

However, for self-employed individuals, like freelancers, the IRS has laid out a different process for paying your taxes. As a self-employed individual, you must pay your taxes four times a year. These taxes are known as estimated quarterly tax payments, and the sum of these payments must match your tax liability for the year.

Paying your quarterly estimated obligations and tracking your business expenses is vital to staying on top of your taxes. Many freelancers struggle with their quarterlies — over 53 million people in the US are freelancing and 75% are overpaying on taxes. This is because they don’t consider deductions while calculating their expenses.

Can you believe that three-fourths of freelancers are overpaying their taxes?

For most freelancers, it is a task to arrange cash to pay for the quarterly taxes due to the unstable income. So it’s very important to plan for it and keep aside the amount that you owe.

To calculate your estimated taxes, you need to consider a few things: your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year. When it comes to paying your quarterly taxes, it is always better to rely on calculation rather than estimation. To accomplish this, you can use FlyFin.

FlyFin’s Quarterly Tax Calculator is powered by A.I. and backed by CPAs. The A.I. scans through all your expenses and provides you with the most accurate quarterly tax amount all the while helping you maximize your savings.

Automated bookkeeping

Organization is one of the fundamental elements of managing quarterly taxes. Mulling over spreadsheets and searching for receipts can be a hectic process. FlyFin can ease your burden.

Their AI-powered Quarterly Tax Calculator works around the clock and scans all your expenses to provide you with the most accurate deductions. At the same, it’ll ensure that you don’t have to pay a penny more than what you actually owe.

There seems to be a lot of confusion about self-employment taxes. FlyFin helps bridge the gap between freelancers and IRS tax policies by making the entire process simple and efficient.

Finding tax write-offs automatically

Once you’ve linked your account, FlyFin automatically scans through your transactions and classifies all the expenses under the following categories:

• Deductions
• Non-Deductions
• Possible Deductions

To determine whether an expense is meant for Personal or Business requirements, the A.I. will ask you to either Accept or Reject the expense for Business needs. If you’re ever unsure about any expense, you can swipe up and seek consultation from a CPA.

The following represents some of the common tax deductions available for freelancers:

• Rent
• Home Office
• Education
• Student Loan
• Advertising & Marketing
• Mortgage Interest
• Charitable Contributions
• Travel & Meal Expenses
• Gas & Mileage
• Phone & Internet
• Start-up Expenses

However, the tough part is that every line of work is different. This is where the A.I. will help you determine your deductions based on your profession and filing status. For example, if you are an artist, you can deduct your art supplies, inventory expenses, etc.

Even if an expense may seem necessary, it might not be considered deductible by the IRS. Therefore, it is essential to distinguish business expenses from other expenses such as cost of goods sold (COGS), capital expenses, and personal expenses.

Eliminating 98% of your work

You can eliminate 98% of your work simply by linking all your expense accounts. A.I. detects your expenses, so you no longer need to keep track of bills and receipts.

With the quarterly income tax calculator, you can easily review the deductions, and eliminate a major chunk of your work. The A.I. asks you some basic questions to accurately calculate quarterly tax payments in a matter of minutes. Some questions might include:

• What is your tax filing status?
• What is your annual freelancing income?
• What state do you live in?

CPA ensured accuracy

With FlyFin, you can bid goodbye to spreadsheets. FlyFin is not only powered by A.I. but also backed by CPAs to provide you with the most accurate tax review.

What’s more, you get a detailed tax report prepared by CPAs, which includes all category-wise expenses and an in-depth summary of your deductions. You can even file your taxes directly through FlyFin with the help of the CPAs or you can export data in the IRS format to file elsewhere.

Filing taxes in just 5 minutes

As mentioned earlier, FlyFin can file your taxes with the help of a CPA, or you can export them to file elsewhere. You can file State and Federal taxes directly through FlyFin.

Since the tax payments are due on a quarterly basis, FlyFin will remind you of the due dates two weeks in advance to make sure your taxes are accurately calculated and filed on time.

Expense tracking is essential, but relying on traditional bookkeeping methods can be hectic and lead to underpaying or overpaying your taxes. Thus, automating your expenses is the most efficient way to lower your taxes and maximize your savings.

FAQs

Q. When are quarterly tax payments due?

A. For tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. The following table represents the quarterly tax due dates for 2021-2022:

Q. Can I seek help from a tax expert if my taxes are complicated?

A. It’s usually better to seek help from a tax expert if your taxes seem complicated. FlyFin AI offers the world's most accurate estimated quarterly tax calculator along with a free CPA review.

Q. What percentage should I pay for estimated taxes?

A. It is generally advised that the taxpayers must pay at least 90% of their taxes throughout the year through withholding, estimated or additional tax payments, or a combination of the two.

Q. Should self-employment taxes be paid quarterly or yearly?

A. As a freelancer, you are required to file an annual return and pay your estimated tax quarterly. You must pay self-employment tax (SE tax) as well as income tax. Quarterly tax is necessary to pay Social Security and Medicare taxes and income tax because you do not have an employer withholding these taxes for you. Please refer to Form 1040-ES, to figure out these taxes or you can use the quarterly tax payment calculator.

Q. What will happen if I do not pay quarterly tax estimates?

A. If you don't pay enough tax through withholding and estimated tax payments, you may be charged a Penalty. There are several types of penalties that the IRS has however three of the most common penalties include the following:

• Failure to file penalty
• Failure to pay penalty
• Underpayment penalty