Who Needs to Pay Estimated Taxes?
- If your payroll is not withholding enough from your paycheck
- If significant income such as interest or dividends are received
- If you are self employed- You receive a 1099 rather than a W-2
- Capital Gains from investment sales or
- Significant Prizes and Awards
For occasional, one-time or very unpredictable income sources estimated taxes are paid quarterly-
- 1st Quarter (January 1- March 31): April 15th
- 2nd Quarter (April 1- May 31): June 15th
- 3rd Quarter (June 1- August 31): September 15th
- 4th Quarter (September 1- December 31): January 15th
Preparing for these payments are essential in keeping your budget stable.
Also, for those with an ongoing or a steady 1099/ Contractor type of income, there are easier ways to pay in your taxes during the year. Set up properly, these might also be able to save you substantially on your overall tax bill as well.