If you're a freelancer or independent contractor, you're considered self-employed, which means you're responsible for paying self-employment and income taxes. Quarterly estimated taxes help you proactively pay taxes as you earn money throughout the year. You can print your quarterly estimated tax vouchers through TaxAct.
When to pay estimated taxes: If you expect a tax bill of at least $1,000 after subtracting withholding and refundable credits, you'll be expected to pay taxes. Even if you owe more than $1,000 when you file, you won’t be assessed an underpayment penalty if your total withholding and timely estimated tax payments equal at least 90% percent of your expected current tax liability or 100% percent of your previous year's tax liability (or 110% if your previous year's adjusted gross income was more than $150,000 or $75,000 if married filing separately).
Why previous year tax liability matters: If your previous year tax liability was zero (0), you're not required to make estimated tax payments for the current year. You can still choose to make quarterly payments so you’re not faced with a huge bill at tax time.
Determining how much to pay each quarter: Either complete the Estimated Tax Worksheet for your tax year or pay 100% percent (or 110% as described above) of your previous year's tax liability. Calculate your total estimated tax for the year and divide that number by four. If you missed a payment, adjust subsequent payments accordingly.
Importance of meeting the payment deadline: Even if you pay enough tax each quarter, you may still be assessed an underpayment penalty if you didn't pay the minimum required amount by the due date each quarter.
To calculate estimated taxes for next year:
Note. The method of paying 110% (or 100%) of the current year's tax liability is only to avoid the interest penalty for underpaying your taxes in the following year. In the TaxAct program, this amount is calculated on Form 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts, Line 4. Use the worksheet method to estimate tax for the following year if you wish to cover all of the estimated tax that will be due on that return.
After you have completed the Estimated Tax Payments section of the Q&A, you have the option to print Form 1040-ES Estimated Tax for Individuals, which includes the quarterly vouchers, and mail the payments or electronically pay the amounts due (both methods are outlined below).
To print individual forms in the TaxAct program, go to our Printing Your Return and Individual Forms FAQ.
To pay estimated taxes electronically once you have already filed your tax return, go to the IRS Paying Your Taxes webpage.
Options to electronically pay your estimated taxes:
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.