Quarterly Estimated Taxes for Freelancers, Simply Explained
Why quarterly exists The US system is pay-as-you-go. With no employer withholding, freelancers are expected to pay tax as income arrives, in four instalments. Usual federal dates: April 15, June 15, September 15, and January 15 (next year). If a date is a weekend/holiday, it moves to the next business day. Do you have to pay quarterly? Not always. You may not need to if: Withholding from a W-2 job already covers your freelance tax, or Your total tax after withholding/credits is small enough under IRS safe-harbour rules, or Your freelance profit is very small. The IRS safe harbours generally let you avoid an underpayment penalty if you pay at least 90% of the current year’s tax, or 100% of last year’s tax (110% at higher incomes) — check the current Form 1040-ES instructions for your year, because thresholds change. ...