{"id":1222,"date":"2018-03-21T14:14:03","date_gmt":"2018-03-21T18:14:03","guid":{"rendered":"https:\/\/www.etax.com\/blog\/?p=1222"},"modified":"2019-07-09T13:28:04","modified_gmt":"2019-07-09T17:28:04","slug":"estimated-tax-payments-2","status":"publish","type":"post","link":"https:\/\/www.etax.com\/blog\/2018\/03\/21\/estimated-tax-payments-2\/","title":{"rendered":"Estimated Tax Payments"},"content":{"rendered":"<p class=\"p2\"><span class=\"s2\">If you are an employee of a business, the employer is responsible for deducting federal and state taxes from your salary. However, independent contractors and self-employed individuals have to take care of this financial obligation on their own. Generally, these individuals will make estimated quarterly tax payments, and skipping them can lead to penalties and interest. Here\u2019s what you need to know regarding <a href=\"https:\/\/www.etax.com\/blog\/2023\/12\/07\/surge-in-irs-penalty-underpayment-consequences-hit-gig-workers-and-consultants\/\">estimated tax payments<\/a>:<\/span><\/p>\n<h4 class=\"p2\"><span class=\"s1\"><b>Estimated Taxes<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">Earnings that aren\u2019t subject to withholding will require the taxpayer to make estimated tax payments to cover their financial liability to the IRS. This type of income can come from dividends, rent, self-employment income, alimony, and awards. If your income has had taxes withheld, you may still owe estimated taxes if you haven\u2019t paid enough income tax. <\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">The first time you have to pay estimated taxes can be a little confusing when you try to determine the amount you owe. Self-employed individuals don\u2019t just owe federal income tax; they are also subject to a 15.3% self-employment tax, which covers the amounts you\u2019d be taxed for Medicare and Social Security. <\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">Don\u2019t forget about deductions, which lower your taxable income, therefore reducing your tax liability. Next, you\u2019ll want to claim any credits you qualify for. <\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">If you owe income taxes as an employee, you have to pay the full amount by April\u2019s filing deadline to avoid interest and penalties. Estimated taxes work a little differently as they are paid in four quarterly installments: April. June, September and January of the next year. <\/span><\/p>\n<p class=\"p2\"><span class=\"s2\">You\u2019ll need to pay enough taxes on each o these due dates to avoid a penalty. Even if you\u2019re owed a refund in April, you can still get penalized for underpayment on one of the due dates. You\u2019ll need to ow less than $1,000 in taxes to avoid being penalized, or you may opt to pay 90% of your liability for the current year, or prove you paid everything for the prior year (Whichever amount is smaller).<\/span><\/p>\n<h4 class=\"p2\"><span class=\"s1\"><b>State Taxes<\/b><\/span><\/h4>\n<p class=\"p2\"><span class=\"s2\">You\u2019re not just required to pay federal taxes, so don\u2019t forget to factor in your state income tax as well. States impose the same due dates for estimated taxes as federal taxes, and depending on the state, you may face penalties or fines for underpayment or late payments. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are an employee of a business, the employer is responsible for deducting federal and state taxes from your salary. However, independent contractors and self-employed individuals have to take care of this financial obligation on their own. Generally, these individuals will make estimated quarterly tax payments, and skipping them can lead to penalties and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1474,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[125],"tags":[172],"class_list":["post-1222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-filing","tag-estimated-tax-payments"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Estimated Tax Payments - eTax.com\u00ae Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.etax.com\/blog\/2018\/03\/21\/estimated-tax-payments-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Estimated Tax Payments - eTax.com\u00ae Blog\" \/>\n<meta property=\"og:description\" content=\"If you are an employee of a business, the employer is responsible for deducting federal and state taxes from your salary. 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