Quarterly taxes—or “estimated taxes”—are tax payments that you may be required to pay if you’re self-employed.
All taxpayers are required to pay their taxes throughout the year as they earn income, but at minimum four times per year. W-2 employees don’t often need to make these payments on their own because their employers withhold taxes from their paychecks, and then send those taxes to the IRS on their behalf.
When you’re self-employed and don’t have an employer withholding taxes from your paycheck, you’ll need to make these payments on your own. You’re only required to pay quarterly if you owe more than $1,000 in taxes, and if those taxes aren’t already being withheld for you. If you meet the requirements for paying quarterly taxes and don’t pay them, you may have to pay an underpayment penalty.
Do I owe quarterly taxes?
Depends on how much you owe in taxes for a given year, and whether or not those taxes are being withheld and paid for you already!
Your Found tax bill will show you the most up-to-date estimate of your tax bill. If your Found tax bill is over $1,000, then it’s a good idea to pay quarterly.
How do I pay?
If you do need to pay quarterly, you can have Found pay these taxes for you. A few weeks before each quarterly tax deadline, your Found app will ask you if you’d like to have your taxes paid on your behalf. Once you indicate that you’d like Found to make these payments for you, we’ll withdraw the money from your Tax Stash and send your payment to the IRS for you.
If you’d rather pay your quarterly taxes on your own, no problem! You can do so on the IRS website here.
You’ll need to make your payments before each of the four estimated tax deadlines. The quarterly tax deadlines for 2020 are:
How much will I owe?
Each of your four quarterly tax payments should roughly equal one-fourth of your total owed tax for the year. If you owe $2,000 for the year, then each of your four payments should be roughly $500.