Quarterly estimated taxes are paid to the IRS during the year for money self employed individuals earn that is not subject to income tax withholding. This income could include freelance wages, dividends, capital gains, and other earnings.
If you make any money from a side hustle or freelance job, and expect to earn over $1,000 for the year, you’re required to pay estimated quarterly taxes. Since taxes are not automatically withheld by an employer, you’re required to calculate these payments and pay the IRS throughout the year. Failure to do so could result in a self employment tax penalty.
Estimated quarterly taxes are due four times a year. For tax year 2022, the dates were:
- April 18, 2022
- June 15, 2022
- September 15, 2022
- January 17, 2023
You can calculate estimated taxes in a few ways. You can first determine what you made in a given period, say between January 1 and March 31, and multiply this amount by four if you expect to earn the same amount for other quarters throughout the year. Or, you can base your earnings on your previous year’s salary if you expect to earn roughly the same amount and divide your tax bill into quarters, paying an equal amount each due date. The IRS also has a worksheet that can help you figure out your estimated tax payments.
If you live in a state with income tax, you also have to make quarterly estimated state tax payments.
If you’ve already paid estimated taxes — or if you can’t remember if you did — you can review the amount a few different ways.
First, you can log into your IRS account to view previous transactions. You may have also requested email copies of any payments made, which you can track down electronically. Another option is to review your bank account and credit card statements for payments to the IRS. If you’re still having trouble tracking them down, you can request a copy of your tax record (complete with payment history) at the IRS website.