Self-Employed? Don’t Forget About the Estimated Tax Deadline

Self-Employed Self-Employed? Don’t Forget About the Estimated Tax Deadline

The article below is up to date based on the latest tax laws. It is accurate for your 2019 taxes, which you will file by the April 2020 (or October 15, 2020, with filed extension) deadline. Learn more about tax reform here.

If you’ve taken the plunge into self-employment, congrats on being your own boss! Whether you’re working as a contractor or making money in the fast-growing sharing economy, don’t forget you may need to pay quarterly estimated taxes. The next quarterly estimated tax payment deadline for the 2019 tax year is coming up on September 16.

Are you prepared? If not, don’t worry – we’ve got the info you need to know!

Who is Subject to Estimated Taxes?

In the United States, we have a “pay as you go” tax system. That means that the government expects to receive most of your taxes throughout the year. Because of this, employees have a certain amount of taxes automatically withheld from their paychecks.

On the other hand, if you are self-employed as a freelancer, contractor or home-based entrepreneur, you most likely don’t have taxes withheld from your pay throughout the year and are instead subject to quarterly estimated taxes. In general, you are expected to pay estimated taxes if you expect to owe $1,000 or more annually for your taxes.

For the 2019 tax year, quarterly estimated taxes are due by April 15, 2019, June 17, 2019, September 16, 2019 and January 15, 2020. Remember, you don’t have to make your 2019 4th quarter payment if you choose to file your full 2019 tax return by January 31, 2020 and pay the entire balance due with your return.

However, if you skipped making a quarterly payment or pay late, you may be subject to a penalty. If you earn your self-employment income unevenly during the year, you may be able to use an annualized installment method at tax time and avoid a tax penalty for not paying estimated taxes every quarter due to fluctuating income.

When Are Estimated Taxes Due?

The good news is that the IRS has a schedule to help you figure out when you need to pay. Here’s the remaining schedule for 2019 estimated tax payment due dates:

  • 3rd Quarter (June 1- August 31): September 16, 2019
  • 4th Quarter (September 1 – December 31): January 15, 2020

If the 15th falls on a weekend or a holiday, then the due date is the next weekday. Don’t forget that the final fourth quarter payment deadline for your 2019 taxes is January 15, 2020.

*Note that if you are a victim of the recent Hurricane Dorian, there may be IRS tax filing and payment deadline extensions if you were affected. You can check for additional relief information on the IRS disaster relief page.

How Can I Figure Out My Estimated Taxes?

You can use QuickBooks Self-Employed to track your income, expenses, mileage and figure out your estimated taxes year-round. The program does the math for you and helps you figure out your estimated taxes so you can easily make the estimated tax deadline. At the end of the year, QuickBooks Self-Employed gives you the ability to export your Schedule C information from QuickBooks Self-Employed to TurboTax Self-Employed to make your annual tax filing easier.

When you prepare your taxes, TurboTax can also automatically calculate your estimated tax payments and print out payment vouchers for you to send into the IRS. You can also use TurboTax TaxCaster to get an estimate of your overall tax picture and if you should make an estimated tax payment. TurboTax TaxCaster is updated to reflect the Tax Reform Law passed at the end of 2017 so estimates will take into account the new 20% qualified business income deduction provision in the new law.

How Can I Pay Estimated Tax Payments?

Now that you know what you owe, it’s time to get your payment in. Fortunately, you have several options:

  • QuickBooks Self-Employed allows you to electronically file your quarterly estimated tax payments to the IRS. E-filing is fast and results in fewer errors because you won’t have to re-enter information into your checkbook or the IRS computer system.
  • You can pay your taxes using the Electronic Federal Tax Payment System (EFTPS), to pay your estimated taxes. Besides making instant payments, it’s also free.
  • You can mail in your payment. The IRS has specific mailing addresses based on the state where you live. Please be aware that your payments should be postmarked by the due date to avoid penalties.

Tips on Making Your Quarterly Tax Payments Easier

  • Forget filling out handwritten forms: When you use QuickBooks Self-Employed for your business, the program will figure out your estimated taxes for you. TurboTax can also figure out and generate your estimated payment vouchers automatically when you prepare your taxes using TurboTax.
  • Keep a record of all your estimated tax payments: You will need to enter estimated taxes you paid when you file your taxes.

Don’t worry about remembering all of this information. TurboTax Self-Employed and QuickBooks Self-Employed have you covered and will help you uncover business expenses to help you save on your taxes! If you have questions as you are filing your taxes or around estimated taxes during the year, you can connect live via one-way video to a TurboTax Live Self-Employed CPA or Enrolled Agent to get the answers you need. A TurboTax Live Self-Employed CPA or Enrolled Agent can also review, sign, and file your tax return.

Comments (19) Leave your comment

  1. Hello, I began working as contractor in March and received my first payment March 21st. I am just now realizing I missed the first quarter payment due April 19th. My Second paycheck came in April 4th. I am now trying to figure out what my estimated tax payment should be for the next quarter, what do you suggest I do about my first payment in March, that I did not declare?

  2. For 2019 I will receive a w2 for $13,000 and also a 1099 for around $50,000. I do the QB Self Employed and I have been entering all of the information into QuickBooks. I am wondering about taxes. For my weekly taxes for payroll I am pulling out (Local Tax, Federal Withholding, Social Security, Medicare and State Withholding). For my business (independent contractor) I am noticing that there is estimated taxes due 4x a year and when I pay those are those taking care of all the (Local Tax, Federal Withholding, Social Security, Medicare and State Withholding)??? I just want to make sure I am keeping up to date with all of my taxes.

    Should I increase the weekly taxes so I don’t owe money at year end for: (Local Tax, Federal Withholding, Social Security, Medicare and State Withholding)

    Thank you for your help!

  3. Hello. I’m retired, collecting S.S. and a pension, and have started doing some work that classified me as an independent contractor. I wished to keep my income under a certain level due to restrictions of the ACA for my spouses health insurance tax supplement, so I’m putting all of the earned income for this work into an IRA. Am I correct in thinking I don’t have to report this until
    I file, or make quarterly payments on this, and don’t have to pay the tax on it until it’s withdrawn?

  4. What happens if you were self-employed until October, but then began work as an employee? You did not make the final quarterly payment (you already overpaid in estimated taxes and do not have the income to make the 4th), but now you can’t file until you receive w2s, which don’t have to be sent until 1/31 – the same date you are expected to file. Please help.

  5. in 2018 I e-filed a timely return with an error. Turbotax does not allow for a1040x when filed on line..
    How can I enter the adjustment for 2019 sicnce it generated a rental property tax loss carry foreward?

    1. Prior year makes a difference.
      ” refund ” or ” tax owed”. Penalties begin at point when taxes are owed.. Normally, Penalties are incurred after the current tax owed exceeds FICA paid.

  6. I just want to make sure. Does Quickbooks Self-employed calculate your estimated quarterly taxes automatically? In other words, does it do the math for you? I’m operating at a pretty significant loss right now, so Quickbooks Self-employed is showing that I owe $0.00 in quarterly taxes. Is that correct? I’ve never not used Turbo Tax, so my understanding of how tax is calculated is limited.

    1. A tax planning rate is 25% for corporate tax planning.
      Do you have other sources of income? Whats the overall revenue vs cost? What was your tax situation prior year?

      When you set up a business: Chart of accounts- list of account numbers issued cash-100…300-Equity
      You can tell qb is the item is taxable or non taxable + the assets ? Deprecation? First year business 1/2 year convention. 2019 assets can be written oflaws.1million. Say is complex …say you had big tax prior year? Big loss this year? Might, have a NOL scenario.

      Taxes are complex laws. Good thing you can get professionals to help you.

  7. Lisa, do you have a program for retired people that need to pay estimated taxes. Income from social security and dividend and small pension and small rental income and farm rental income. Been using turbo tax and quicken for 15 years.

  8. if i missed a 1st and 2nd quarter payment, can i send more money for the 3rd and 4th quarter? for example, if i owe $500 each quarter: can i send $1500 in sept and $500 in jan – or $1000/sept & $1000/jan – without penalty?

  9. If a person becomes self employed in the middle of the year, when are you required to make estimated tax payments? i.e. becomes self employed in July 2017…. is there a payment due September 15, 2017 or do file your taxes for 2017 as before and start estimated payments on April 15, 2018?

    1. Hi Kim,
      Whether you pay estimated taxes in September depends on how much taxes you expect to owe in 2017. If you expect to owe $1,000 or more for the year then you are expected to pay estimated taxes by the due date to avoid any underpayment penalty. QuickBooks Self-Employed will help you easily figure out your estimated taxes https://quickbooks.intuit.com/self-employed/
      Thank you,
      Lisa Greene-Lewis

  10. I need to know if I start a hobby/sole proprietor business not an LLC can I pay my taxes on a yearly basis? Please answer ASAP.Thanks.
    David P.Thobaben

  11. Goodmorning. I filed my fedreal return on January 7. I was accepted on January 11 2016. Will I be seeing a refund date to my netspend card anytime soon?

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