What you Need to Know about Estimated Taxes

Being self-employed has a lot of amazing benefits. However, there are also some things about it that can be a little on the annoying side. One of those things is having to pay quarterly estimated taxes. Of course, not every self-employed person has to pay these taxes, but it’s important to know what they’re all about and whether or not you’re required to pay them.   

Who Has to Pay Estimated Taxes?

If you are self-employed and do not have any kind of taxes withheld from your pay, then it’s your job to make quarterly estimated tax payments each year. The general rule is that you if you are going to owe over $1,000 in taxes each year, you’re going to have to make these quarterly payments.

When are Quarterly Tax Payments Due?

As the name “quarterly” implies, these payments are due four times a year. For the year 2018, the due dates were:

·        April 18, 2018

·        June 15, 2018

·        September 17, 2018

·        January 15, 2019

What if You Missed a Payment?

If you’re new to being self-employed and found yourself confused about these estimated tax payments or if life got crazy and you missed an estimated tax payment, it’s a good idea to adjust any remaining payments to try and help reduce what you will owe come tax time.

Unfortunately, you may have to pay a penalty for missing the payment, which is why it’s best to get and stay on a payment schedule, preferably with the expert help of a skilled accountant.

As you can see, there’s a lot to know and think about when you become self-employed. Estimated taxes are really just the tip of the iceberg. Thus, if you are going to be self-employed, strongly consider hiring an accountant and/or financial adviser to assist you in filing all taxes correctly and making sure you get everything taken care of as required by the IRS.