This will be the first year that I am completely self-employed. Does anyone know what exactly you need to do to file quarterly taxes? Just estimate this quarter and take a payment to the bank, or is that too easy? Thanks in advance.
You have to fill out the form and mail in. Four equal installements are required. Once you file the first voucher the IRS will mail you pre-printed forms for the next 3. The first payment is due in 4 days (postmark). I think you can download a pdf version of the voucher from the Irs.gov web site. I can find you one and upload it somewhere if need be. Now here is a real tip for you. As long as you mail in 1/4 of your 2007 total tax due four times during the year (line 63 on form 1040) there will never be a penalty or interest payment due no matter how much you owe at the end of the year. Underpay or not pay on time and you may have both. You may reduce the line 63 amount by any with-holding you are you spouse may have during the year 2008. But make darn sure you pay in enough. As a self employed person you are going to be adding FICA taxes to the total you owe and they are 15.3% of net income. More questions?
colbyt, excellent reply! You have nailed it. Rep added. And to the OP, thanks for the timely post. It reminded me to get in my first quarterly Form 1040-ES due April 15, which I would have forgotten.
Thanks for the great advice! A few quick questions: The amount you send them doesn't really need to be remotely correct? As long as it is four equal payments which equal 25% or more of my last years taxes due. I am expecting to pay about 10k in taxes. Can I still mail it in, or do I have to go to a bank? I think I read large payments must be done electronically or at a financial institute. I was hoping to mail it though because I have to wait till the 15th to get paid. Again, thanks for help.
Haha, well...I think you should be able to mail it with no problem. I just sent in my 2 checks for 2007 taxes and my 2 checks for 2008 quarter 1. However, I only owe about $600...
You need to estimate how much taxes will be owed and then send in 4 payments to cover them. Go to irs website download forms they need to be mailed by tuesday the 15 of april and do not forget state taxes
Consider hiring a CPA. It's a great investment and they'll pretty much just tell you what to do and when to do it. Plus they find all the stuff you probably forgot to deduct. Mine pretty much pays for himself that way.
No. The total amount you pay in by Jan 15, 2008 must equal 100% of your 2007 line 63 to avoid penalty and interest. Also you should pay 1/4 of the estimated total with each payment. If you have employees and are taking taxes and FICA out of their checks you are required to make periodic deposits at the local bank as often as once a month depending on the amount of money involved. You also will need an EIN (Employer ID nummber) which you should have gotten before you started with-holding. If it is just you and no employees filing a 1040-ES and mailing the payments in a timely fashion is all that is required. A postmark of the 15th or next business bay if the 15 falls on Saturday or Sunday is all that is required. You may also need to file estimated taxes with your state or local government. Here, KY we must file with state but can pay the local leeches at the end of the year.