It’s that time again – the next payments for estimated quarterly taxes are due on September 16. A few other people thinking about self-employment have asked me about how hard estimated quarterly taxes are to file, and I figured it was time to let everyone know that it’s really easy! It’s just one little form. The hardest part is parting with the check to give the IRS your money.
Okay, so here is the link to find the form you’ll need to fill out to include with your check.
You’ll see a ton of info and even a worksheet to help you figure out how much to send in. But if you want to keep it super simple, don’t freak out. You can simply divide what you owed overall last year by 4, and then send in that amount every quarter.
If you end up owing more than you did last year, you can send in the remainder in April with no penalties since you paid 100% of what you owed the year before. If you end up owing less than the previous year, you’ll get that refund in April. Either way, it keeps things super simple during this year.
Here is the only part of the form that you really care about:
Just Make Sure You Have the Money to Send
Okay, so now you know how simple it is to send the IRS their share every quarter. The trick is remembering to save some cash for them as you go, right?
Make it easy on yourself. We have all of our self-employment money deposited into one savings account and distribute it from there. We simply transfer a little more than 30% of what we make into a different savings account that we use just to save up the taxes we may owe to the IRS.
Normally we end up paying 25%-30% of what we make, so we move a little more than that to side and forget it is there until we write the checks. It’s still painful to send off thousands of dollars 3-4 times a year, but at least it is set aside for us to send. Freaking out about rounding up tax money every 3 months would drive me insane.
And that’s all there is to estimated quarterly taxes. Any questions that I didn’t cover?