For most of us who work a 9-5 job, paying taxes is something we only have to worry about once a year. For people who freelance or work on a contract basis, however, paying taxes is something that needs to be dealt with quarterly. That’s right: four times per year, you’re going to be filling out tax paperwork and making sure Uncle Sam is getting his cut of your income!
If you think tax preparation in Des Moines, IA is something of a headache once a year, imagine having to figure out your estimated taxes four times throughout the year? The prospect of this task alone can send people into a depression! The good news is, however, that just like a tax professional can assist you in your annual filings, they can also assist you if you’re someone looking at paying quarterly taxes instead.
The quarterly tax timetable
The first step in responsibly paying your quarterly taxes is to know when they’re due and during what dates you need to be accounting for your income. Currently, the quarterly tax table looks like this:
- January 1 through March 31, with taxes paid on April 15.
- April 1 through May 31, with taxes paid on June 15.
- June 1 through August 31, with taxes paid on September 15.
- September 1 through December 31, with taxes paid on January 15.
Now, as you can see from the table above, these timeframes are equally incremented—this is because the fiscal year is different than the calendar year. So, while you might have it in your mind that you need to pau taxes every three months, the reality is a bit different. Make sure you’re paying attention to the time table so that you can seek tax preparation in Des Moines, IA on time for your next quarterly deadline!
Paying what you owe
Once you’re familiar with the due dates of your quarterly taxes, it’s necessary to start to determine how much you’ll owe in taxes over the course of each quarter. For this, you’ll need a 1040-ES or, you’ll need to consult with a tax prep professional regarding your annual take home amount.
Ideally, the IRS would like you to submit four equal payments throughout the year based on your estimated taxable income, but as we all know, it’s not as cut and dry as that—especially if your income fluctuates throughout the year based on project volumes and earnings. This is why it’s especially important to consult with a tax prep professional when filing estimated taxes. They can help you to determine what your owed amount is based on your income from the previous year, if you expect it to be the same or higher.
Now, paying estimated taxes can get infinitely more complicated the more you earn as a contract employee. Things like safe harbor payments and deducted payroll taxes from employers can all complicate your filing, which makes it ideal to work with someone who is experienced in navigating these potential pitfalls.
If you’re a contract or freelance employee who will be paying estimated taxes this year, make sure you’re coming to Accounting & Tax Professionals, PLC for tax preparation in Des Moines, IA!