If you’ve taken the plunge into self-employment, congrats on being your own boss! Whether you’re working as a contractor or making money in the fast-growing sharing economy, don’t forget you may need to pay quarterly estimated taxes. The next quarterly estimated tax payment deadline is on June 17, 2024!
Are you prepared? If not, don’t worry – we’ve got the info you need to know!
Who is Subject to Estimated Taxes?
In the United States, we have a “pay as you go” tax system. That means the government expects to receive most of your taxes throughout the year. Because of this, employees have a certain amount of taxes automatically withheld from their paychecks.
On the other hand, if you are self-employed as a freelancer, contractor or home-based entrepreneur, you most likely don’t have taxes withheld from your pay throughout the year and are instead subject to quarterly estimated taxes. In general, you are expected to pay estimated taxes if you expect to owe $1,000 or more annually for your taxes.
However, if you skip making a quarterly payment or pay late, you may be subject to a penalty. If you earn your self-employment income unevenly during the year, you may be able to use an annualized installment method at tax time and avoid a tax penalty for not paying estimated taxes every quarter due to fluctuating income.
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When Are Estimated Taxes Due?
The 2024 quarterly estimated tax deadlines are:
- 2024 1st Quarter (January 1 – Mar 31): April 15, 2024
- 2024 2nd Quarter (April 1 – May 31): June 17, 2024
- 2024 3rd Quarter (June 1 – August 31): September 16, 2024
- 2024 4th Quarter (September 1 – December 31): January 15, 2025
If the 15th falls on a weekend or a holiday, then the due date is the next weekday.
*Note that if you are a victim of a recent federally declared disaster, IRS tax filing and payment deadline extensions available to you. You can check for additional relief information on the IRS disaster relief page.
How Can I Figure Out My Estimated Taxes?
You can use QuickBooks Self-Employed to track your income, expenses, mileage, and figure out your estimated taxes year-round. The program does the math for you and helps you figure out your estimated taxes, so you can easily make the estimated tax deadline. At the end of the year, QuickBooks Self-Employed gives you the ability to export your Schedule C information directly from QuickBooks Self-Employed to TurboTax Premium, making your annual tax filing easier.
When you prepare your taxes, TurboTax can also automatically calculate your estimated tax payments and print out payment vouchers for you to send into the IRS. You can also use TurboTax TaxCaster to get an estimate of your overall tax picture and help you determine if you should make any estimated tax payments.
How Can I Pay Estimated Tax?
Now that you know what you owe, it’s time to get your payment in. Fortunately, you have several options:
- QuickBooks Self-Employed allows you to electronically file your quarterly estimated tax payments to the IRS. E-filing is fast and results in fewer errors because you won’t have to re-enter information into your checkbook or the IRS computer system.
- You can use the Electronic Federal Tax Payment System (EFTPS) to pay your estimated taxes. Besides making instant payments, it’s also free.
- You can mail in your payment. The IRS has specific mailing addresses based on the state where you live. Please be aware that your payments should be postmarked by the due date to avoid penalties.
Tips on Making Your Quarterly Tax Payments Easier
- Forget filling out handwritten forms: When you use QuickBooks Self-Employed for your business, the program will figure out your estimated taxes for you. TurboTax can also figure out and generate your estimated payment vouchers automatically when you prepare your taxes using TurboTax.
- Keep a record of all your estimated tax payments: You will need to enter the estimated taxes you have paid when you file your taxes.
Don’t worry about knowing these tax rules. TurboTax will ask you simple questions about you and give you the tax deductions and credits you are eligible for based on your entries. If you are Self-Employed, you can use QuickBooks Self-Employed to easily track your income, expenses, mileage, capture your receipts and estimate your quarterly taxes year-round. Your information can then be easily exported to TurboTax Premium at tax-time.
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