re: Independent Contractor Taxes Self-Employment HALP VIEW POST

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Pay that amount quarterly to the IRS.

How would that work, I’m only familiar with yearly exchanges with the IRS.

 

There's a quarterly estimated tax payment form. This is required if you are going to end up owing over about $1k by the end of the year.

Estimated tax payments are required based on the total amount of tax owed at the end of the year, not based on a particular source of income. Meaning, if the OP has excess tax withheld from previous/concurrent jobs, these quarterly payments might not be necessary.

 

Honestly, I'm not sure.

This could be something that varies by state. The last year I was independent I got fined for not making quarterly payments. I've not done more independent work to know exactly how.

Personally only have experience with paying taxes after a year and not doing the quarterly payments. I was paid $20/hour, worked about 25 hours a week. I figured I could save enough money come next April instead of sending checks every quarter.

Once I filed I had to owe taxes (as expected) but don't remember being charged a fine for not paying quarterly. The job was in 2017. Not sure if the rules have changed though.

Depending on the amount you owed they may require you to make quarterly estimated payments the next year -- regardless of what you expect to make. You can counter that with some other IRS forms though.

In particular there is one you can file that basically says I have no idea how my money will come in and can't possibly pay 1/4 of it in Q1. This can help avoid any future fines where the IRS will penalize you saying you withheld payment till the end of the year.

 

You mail them a check along with a 1040-ES. They check what you paid vs what you actually owe annually. Because of this you want to estimate on the low end.

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