{"id":121,"date":"2022-04-27T11:59:04","date_gmt":"2022-04-27T11:59:04","guid":{"rendered":"https:\/\/c1mdevsite.com\/braunability.com\/quarterly-tax-deadlines-for-self-employed\/"},"modified":"2022-04-27T11:59:04","modified_gmt":"2022-04-27T11:59:04","slug":"quarterly-tax-deadlines-for-self-employed","status":"publish","type":"post","link":"https:\/\/c1mdevsite.com\/mdctraining.ca\/quarterly-tax-deadlines-for-self-employed\/","title":{"rendered":"Quarterly Tax Deadlines for Self-Employed"},"content":{"rendered":"
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Throughout the year there are certain days that don\u2019t seem to come around fast enough\u2014 birthdays, holidays, and vacation days. Then, there are some days that people dread just the thought of, like Tax Day. One Tax Day is stressful enough for taxpayers, but did you know that the self-employed have <\/span>four <\/span><\/i>tax days every year?\u00a0<\/span>\u00a0<\/span><\/p>\n

That\u2019s right- four quarterly tax deadlines throughout the year to keep track of. Why? Because the self-employed pay taxes a little differently than employees who work under a direct employer. They don\u2019t pay more, they don\u2019t pay less, they just pay differently, taking more personal responsibility for the process.\u00a0<\/span>\u00a0<\/span><\/p>\n

Plan Your Quarterly Taxes<\/h2>\n

Tax planning and compliance are especially important, and sometimes daunting, for the self-employed. Therefore, many taxpayers seek the help of professional tax preparation services, especially the newly self-employed. Waters Hardy<\/a> works with many clients in this situation, as self-employed clients are learning to navigate a new system. We also guide our current clients who have been self-employed for years but are looking for advice to maximize their tax benefits in smart ways. Whatever your situation, Waters Hardy is your tax prep resource, offering expert advice, professional work, and exceptional service.<\/span>\u00a0<\/span><\/p>\n

Why Quarterly Payments?<\/span><\/b>\u00a0<\/span><\/h2>\n

The U.S. tax system is a \u201cpay as you earn\u201d system, meaning that taxes are paid to the government as you receive income throughout the year. If you\u2019re employed traditionally, your Social Security and Medicare taxes are split between you and your employer.\u00a0<\/span>\u00a0<\/span><\/p>\n

Since taxes come out of every paycheck, this means the government is maintaining a steady amount of income throughout the year. If you work for yourself, however, income taxes won\u2019t be withheld from your paycheck automatically. The IRS uses quarterly payments to tax the self-employed all year, ensuring they are still getting what\u2019s due at a steady pace.<\/span>\u00a0<\/span><\/p>\n

Who Pays Quarterly?<\/span><\/b>\u00a0<\/span><\/h2>\n

Freelancers, independent contractors, and small-business owners<\/span>\u202f<\/span><\/b>who expect to\u202f<\/span>owe<\/span>\u202f<\/span><\/b>at least<\/span><\/i>\u202f<\/span><\/b>$1,000 in taxes<\/span>\u202f<\/span><\/b>from their self-employed income all pay quarterly taxes. If you owe less than that, you can just pay your taxes\u202fon that income when you file your annual tax return.<\/span> If you\u2019re not sure if you\u2019ll need to pay quarterly taxes, you should reach out to professional accounting services who can help you with your tax prep. However, if you owe a lot of money and don\u2019t file quarterly, you might have to pay an underpayment penalty in addition to the taxes you owe. <\/span>\u00a0<\/span><\/p>\n

Calculating Estimated Tax Payments<\/span><\/b>\u00a0<\/span><\/h2>\n

Depending on your income, the tax year, your filing status, and eligible deductions, your quarterly taxes will vary. Additionally, you will still file an annual tax return showing what you actually made, like everyone else. The good news is that your quarterly payments will be estimations of the tax you expect to owe on Tax Day. As a result, getting this amount exactly perfect isn\u2019t crucial.\u00a0<\/span>\u00a0<\/span><\/p>\n

In fact, the IRS gives quarterly filers a 10% buffer in case they\u2019re slightly off. If you overestimate, you get that extra money back as a tax refund. This is safer than underpaying and<\/span> being blindsided by a huge tax bill when it\u2019s time to pay up.\u00a0<\/span>\u00a0<\/span><\/p>\n

Here are some ways that you can reasonably calculate what your estimated quarterly tax payments should be.<\/span><\/b>\u00a0<\/span><\/h3>\n
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  1. Estimate your taxable income.<\/span>\u00a0<\/span><\/li>\n
  2. Calculate how much you\u2019ll owe in income and self-employment tax.<\/span>\u00a0<\/span><\/li>\n
  3. Divide your estimated total tax into quarterly payments.<\/span>\u00a0<\/span><\/li>\n
  4. Send an estimated quarterly tax payment to the IRS.<\/span>\u00a0<\/span><\/li>\n<\/ol>\n