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Here’s What You Need to Know About Quarterly Estimated Taxes

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Here’s What You Need to Know About Quarterly Estimated Taxes

Each year, the Internal Revenue Service (IRS) collects quarterly taxes from companies, corporations, sole proprietors and self-employed individuals – every taxpaying entity in the U.S, either directly or indirectly. This means that if you are an employee at a company you pay indirect quarterly taxes when your employer withholds your income, so that it can pay its own quarterly taxes. You see these withholdings on your regular paycheck stubs. If you are an employee, you probably receive a W-2 tax form at the end of the tax year, and you are only required to file your taxes once a year. But if you are a freelancer, a self-employed individual or a 1099 contractor, you’ll have to pay your quarterly taxes on your own. Quarterly estimated tax payments can be helpful, as you don't have to pay a huge sum once a year. Rather, you can pay as you earn. Your quarterly taxes are directly dependent on the amount of income you make in a quarter. The payment is different every quarter, as self-employed individuals and freelancers income often fluctuates.

Table of contents

Do I need to pay my IRS quarterly taxes?...Read more

How much do I owe for my IRS quarterly tax returns?...Read more

Important dates for paying quarterly estimated taxes...Read more

What’s the penalty for not paying your quarterly estimated taxes?...Read more

How can I pay my quarterly taxes?...Read more

Do I need to pay my IRS quarterly taxes?

Yes, if you are a freelancer, 1099 contractor, self-employed individual or gig worker, quarterly tax payments are required by the IRS. This applies to anyone who is not on a company’s payroll and who are working as freelancers outside of their normal work. The only exception to this is if you are a freelancer and you owe less than $1,000 in taxes, and you had no tax liability in the previous year, you are not required to pay quarterly taxes in the current year. In addition, if you are a US citizen, and your prior tax year was at least 12 months, you'll be required to pay quarterly estimated taxes.

How much do I owe for my IRS quarterly tax returns?

Before you make a quarterly estimated tax payment, you need to know the amount to pay. To find out what you owe, you need to consider your quarterly income information or the tax information from the previous year, your expenses and your state of residence. You can also use FlyFin's estimated tax calculator to get a good idea of your quarterly taxes. Once you have a fair idea of your income, you can estimate your taxes. The IRS wants you to pay at least 90% of what you estimate your income to be each quarter, which is why they are called estimated taxes. Remember that if you pay less than 90% of your estimated taxes you can incur a penalty.

Important dates for paying quarterly estimated taxes

All freelancers, 1099 contractors and self-employed individuals need to pay their quarterly estimated taxes on:
  • April 15th
  • June 15th
  • September 15th
  • January 15th of the following year

What’s the penalty for not paying your quarterly estimated taxes?

If you don’t pay your quarterly taxes, or you underpay them, you might face the IRS’s wrath in terms of penalties. The IRS penalties can potentially double the amount of taxes based on the amount owed, so the more the amount not paid the bigger the penalty sum.
Alt text: Learn how to calculate the underpayment penalty amount for taxes. Includes formula for failure-to-pay penalty and interest. No mention of self-employed or 1099.
IRS penalties add up every month you delay your payment, and so does the interest amount attached to the total tax liability. It’s always better to pay your taxes on time rather than incurring penalties.
Alt text: Image displaying the text "FLY FIN" with a prompt to enter the amount of underpayment in dollars. Relevant for self-employed, 1099, freelancer, and taxes.

How can I pay my quarterly taxes?

Due to the varying demographics of the country, the IRS offers two ways to pay your quarterly taxes. The first is by check. You can send a payment check to the IRS or you can send a money order. Just drop it and a payment voucher in the mail to the U.S. Treasury Department to one of two addresses based on your state of residence. The payment vouchers and the address are mentioned on the IRS Form 1040-ES. Just make sure to send the check in time for it to reach the IRS office before its due date.
Image of a payment voucher for estimated taxes (Form 1040-ES) for the year 2022. Use it to make a payment by check or money order.
The second method is using IRS Direct Pay to e-file. It’s also the easiest way to pay your estimated tax because you can make the payments in just a few clicks. You don’t need to work through the paperwork, and it’s usually a quick 10 to 15-minute job.

Common Mistakes to Avoid with IRS Quarterly Payments

Learn how to avoid common tax mistakes with IRS quarterly payments. Stay compliant, avoid penalties, and manage your self-employment taxes effectively.

Risks and Benefits of Paying Estimated Taxes All at Once

Explore the advantages and disadvantages of paying estimated taxes all at once. Learn how it impacts financial planning, cash flow, and potential penalties.

Tax Payment Issue

If you miss a quarterly tax payment, there are things you can do to minimize the damage. Here's how to take action now.

Overpayment of Estimated Taxes

Overpaying on your taxes means you’ve given the IRS more than you owe. You need to notify the IRS to receive your tax refund.

Understanding Estimated Taxes

Learn how to calculate and pay estimated quarterly taxes to avoid penalties. Essential for self-employed individuals with non-withheld income.

Key IRS Quarterly Payment Dates for 2024

With our extensive reference to IRS quarterly payment dates for 2024, you can stay ahead of tax obligations. As a self-employed person, learn how to control your cash flow, stay out of trouble, and make your payments on time.

Methods to Make Quarterly Payments to the IRS

Learn the most effective methods for sending the IRS your quarterly payments. To make sure you pay your taxes on time, become knowledgeable about online payment choices, sending in payments, and setting up automated payments.

Tracking and Managing Your Quarterly Payments

Learn how to organize and manage quarterly estimated tax payments, track deadlines, and avoid penalties with tips on accurate record-keeping and accounting tools.

Quarterly Payments for Different Types of Income

Learn how to manage quarterly tax payments for various income streams, including business, investment, and passive income, while avoiding common pitfalls.

Common Mistakes to Avoid with IRS Quarterly Payments

Learn how to avoid common tax mistakes with IRS quarterly payments. Stay compliant, avoid penalties, and manage your self-employment taxes effectively.

Risks and Benefits of Paying Estimated Taxes All at Once

Explore the advantages and disadvantages of paying estimated taxes all at once. Learn how it impacts financial planning, cash flow, and potential penalties.

Tax Payment Issue

If you miss a quarterly tax payment, there are things you can do to minimize the damage. Here's how to take action now.

Overpayment of Estimated Taxes

Overpaying on your taxes means you’ve given the IRS more than you owe. You need to notify the IRS to receive your tax refund.

What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! It tracks all your business expenses automatically using A.I. to find every possible tax deduction. Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
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