Are you planning on joining the gig economy and becoming self-employed? Are you embarking on retirement after years with a traditional employer? We wish you the best, and, along with the IRS, we remind you to pay your quarterly income taxes.
Without an employer to submit payments regularly out of your paycheck, you are now responsible for paying your own taxes in increments to fulfill America s pay-as-you-go tax requirements. You must make quarterly estimated tax payments if you expect to owe taxes of at least $1,000 for the year.
Underpayment of estimated taxes is on the increase, according to analysis of IRS data. The IRS found that the number of taxpayers incurring penalties related to estimated taxes jumped from 7.2 million in 2010 to 10 million in 2017, an increase of nearly 40%. Making matters worse, the Wall Street Journal reports that the potential number of filers owing penalties may be greater than the overall number of taxpayers filing estimated taxes Ââ meaning