For many freelancers (or people who earn significant untaxed income from investment or rentals), paying estimated quarterly taxes will help avoid penalties in the form of interest charges. We can't guarantee that these guidelines will apply to every situation, but here's an overview:
STEP 1: Should you care about estimated tax payments?
Did you owe more than $1,000 to the IRS when you filed your most recent tax return?
Did you have a big tax bill recently that you want to avoid for next year?
Are you having a big year for freelance income or other untaxed income (rental properties, large investments, etc.)?
If you answered yes to any of these questions, you should consider paying estimated taxes quarterly. You'll save money and decrease your stress around tax time!
STEP 2: Figure out how much you should pay.
Follow a well-written guide online (like this one) or use the estimates outlined in our guide.
Want us to help? Set up a consultation to go in-depth with one of our advisors.
STEP 3: Make your payments.
Pay online:
Other states: Google "Where to pay estimated taxes [your state]"