Quarterly tax payments are a way for the IRS to make sure you're withholding income when an employer isn't doing it for you. It requires paying part of your taxes four times a year, instead of all at once on April 15th.
Most independent contractors are required to pay estimated taxes. The only exceptions are if you earn less than $12,000 per year, or if most of your income is from a full time (W2) job.
If you wait until the end of the year to file taxes, you’ll have to pay a penalty. In 2019, that penalty is around 5% of your total tax payment, plus inflation. In total, that's about 7% interest.
You can pay online with direct deposit. For Federal taxes, you can pay online: here. Most states also allow you to pay online - you'll need to create an account on the State revenue service website.
There are also services that will file quarterly taxes for you, such as Keeper.
This calculator estimates your federal and state-level income tax, and then divides by four.
It uses the latest federal and state level tax brackets and standard deductions. If you indicate that you have a W2 job, the calculator assumes standard withholding allowances and subtracts your expected end-of-year refund from the end-of-year tax liability.
To simplify the experience, the following caveats should be noted:
This free calculator was built by the team at Keeper. We'd love to hear from you! You can send us an email at firstname.lastname@example.org or give us a ring at (415) 644-8982. Our hours are M-F, 8 am to 6 pm Pacific Time.