Yes - most 1099 contractors are required to pay “estimated” taxes, every 3 months. It’s not as scary as it sounds, and Keeper is here to help.
Most independent contractors are required to pay estimated taxes. There are two exceptions:
If you wait until the end of the year to file taxes, you’ll have to pay a penalty. It’s not huge, but it’s not nothing.
In 2018, it was around 5% of your total tax payment. Breaking it down, that’s about $150 for every $10,000 earned as a 1099 contractor (assuming a standard 30% effective tax rate).
As long as you’re tracking your income and tax write offs, it’s actually quite simple! You’ll just make a payment online. The formula is essentially your income in the past three months, subtract your tax write offs, and multiply by your effective tax rate (approx. 30%).
In 2019, estimated taxes are due on the following dates:
Of course, Keeper can handle estimated taxes for you. Starting on June 17th, we'll be doing our first set of estimated tax filings on behalf of our members, for free. If you’re interested in participating, please let your bookkeeper know.
We use computer algorithms to monitor your purchases for tax write offs most people miss... like phone bills, insurance charges, home office expenses, gas fill ups, and so on. It's $10 per month.
Note: at Keeper, we care about helping you save on taxes. That leads us to generalize tax advice which ultimately cannot be completely generalized. Everyone's situation is different. Please drop a note above or reach out via email if you have questions.