The self-employed must make estimated tax payments to the IRS at least four times a year
If you’re an employee who earns all of his income in wages or salary, and gets a paycheck with taxes withheld, you can stop reading right now. Tax payments are already made on your behalf and you don’t need to worry about paying estimated taxes.
But if you’re self-employed, or receive any other unorthodox income, read on. You will almost certainly need to know about estimated tax.
Estimated tax is how you pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, rents, alimony, etc. In addition, you may also need to make estimated tax payments if you do not elect to have taxes taken out of your unemployment compensation or taxable social security payments.
Do I have to file estimated tax?
To get down to the nitty-gritty, the IRS requires you to pay estimated tax if you meet both of the following conditions: (more…)