Am I required to make quarterly estimated tax payments??

Quarterly estimated tax payments come as a surprise to many first-time self employed business owners. When you don't have an employer withholding and remitting taxes on your behalf throughout the year, the responsibility falls on you! But you're not always required to make payments. In this video I show you how to do a quick but fairly accurate way to estimate what you should pay (if anything) and how to make those payments.

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[ames]

Finally, a straightforward and clear presentation that includes the final step of how to pay! After years of W2 wages and just filing using free online programs, all this was new. Thank you!

[christines]

Thank you!! I never have made these (because enough withdrawn on W-2) but your simple explanation makes me want to look at your other videos.

[nkb]

Thank you for making this so easy to understand!

[KatieLibby]

I was advised that I could roll over traditional IRA funds, equal to my taxes from the previous year, to a ROTH in the fourth quarter and have the entire amount withheld. The IRS would recognize that as covering my taxes due.

[headlibrarian]

Making a single Q4 100/110% safe harbor payment seems the best plan if floating an overpayment isn’t a financial hardship. 30s to compute and a couple of minutes to pay.

[olga_safronova-video]

Thank you very much for the video! Can you explain this point: if you pay or have paid an amount equal to the tax for the previous year, you don't have to make estimated payments? So do I have to make an estimated payment once in the first quarter or does it relate to the fact that I have already paid the total tax for the previous year? Or can I pay the amount next year, for example, I know that my taxes will be higher for 2024 than for 2023 and I plan to pay them in March 2025, so I don't have to make planned quarterly payments during the year?

[carolynbell]

My CPA office is so understaffed they asked for me to coming in May to deal with my new studio/LLC.

My CPA friend knows I’m a start up and wouldn’t owe so she recommended doing nothing. But the downside might be a penalty 😮

I really have no idea. I’ve put $55k in my studio and have collected $3k in sales so far.

The advice to divide what I owed last year by 4 and make that installment was super helpful.

[AkornzStash]

I've been struggling with this, I had no tax returns for the past 5 years due to several major injuries I had, and then unemployment since I got to where I could do some work. This year I'm self employed. I've made over a $1k, but have no idea how much I will make for the year. I've been holding back 30% of my income, but my pay can widely vary month to month. So I still don't know how much to pay quarterly.

[PaulDeLeo]

Excellent video! How about state estimated taxes next? Particulary Michigan which has a brutal 25% penalty if you didn't make estimated tax payments.

[LA-qttr]

Am i required to mail the 1040ES form to the IRS if i make the payment online?

[CHRISBAUER-wofn]

I am an employee, my wife is Schedule C self-employed. We converted $260k IRA to Roth this year, paid the 24% due on it immediately after the conversion. Therefore our 2023 Total Tax Liability was unusually large @ $79k, my CPA told us to pay our quarterlies based on 2023 taxes @$20k per quarter. That would equal more than my wife earns for the whole year! I see no reason I cannot use the 90% rule for our 2024 quarterlies based on the expected 24% rate (again) based on my wages, her expected Schedule C and a much smaller Roth Conversion. Any thoughts? Thank you - excellent channel, new subscriber!

[JBoomer-piml]

I ran into this with Maryland. I thought that I could put my money a high yield savings account and earn interest. They charged me late payment fees, even though I paid my entire tax debt in full.

[debrad]

What if we owe more than $1000. And don’t pay the estimated quarterly taxes but rather have an additional amount taken out of our check that equals what our underpayment was for tax year 2023?

[joseluismunoz]

Thanks for the heads up on looking into our state taxes also.

[funfindsforyou]

Great video! You kind of touched on it, but I wanted to clarify - if I want to pay 100% of prior year tax, would I take line 24 less any credits on lines 27-29 to come up with the total to pay?

[morgans]

It’s Q4, what if you haven’t made these payments all year? How does that affect your return at the end of the year?

[LA-qttr]

How to put the breakdown for federal, social security and Medicare if i just pay the total tax due whn i pay online?

[Thesimplebodyshop]

But how do I estimate taxes if it’s a company I just opened 3 months ago and prior I was just a normal employee?

[sarahfoster]

What if I have two businesses, do I make the adjustment based off of total revenue of both business combined or separate? Also, would it be gross income or net income?

[LateBoomer]

I have one more year to pay off my $500 repayment for my first-time home buyer credit in 2008. I just started earning self-employment money last year. When determining if I'll have to pay more than $1000. for 2024, do I factor in that $500 repayment?