Tax question

[Anonymous 1]

I have no clue if this depends on each state or not, but I wondered if anyone knows if you have to pay quarterly taxes once you hit a certain amount. My husband has a 2nd job that does not take taxes out. We are fine to make the full payment at tax time but the tax service says we have to pay quarterly payments. Does anyone know anything more about this?

[LiveWhatULove]

Yes, if you are self-employed, you must pay taxes quarterly.

https://www.irs.gov/businesses/small-bu ... come%20tax.

Also if you have too large of tax bill — you will be fined for under-paying throughout the year — we are paying the fine, and it angers me.

[Traci_Momof2]

Yes. In short, you have to pay in your taxes throughout the year. You can't just pay one bulk payment at the end of the year without penalties. So if your taxes aren't being paid, or aren't being paid enough, through withholdings on a paycheck, then you have to make quarterly estimates. The due dates for the quarterly estimates are April 15, June 15, Sep 15, and Jan 15 (of the next year). Typically in order to avoid a penalty you have to pay in either 90% of the tax for the current year or 100% of the tax from the prior year.

I work for a CPA and when we have clients who owe too much at tax time and didn't pay in enough throughout the year, we print out payment coupons for the estimates. The amount on the estimates is based on the actual tax owed for 2023 so that if they pay them all on time, then they have 100% of 2023 tax paid in for 2024 and should avoid penalty.

Everything I've said above is for IRS, which is federal, which is all the same laws regardless of what state you are in. Now many (most?, all?) states have their own rules about paying in throughout the year that may be similar to the IRS but could be different in exactly how it's calc'd. For example, I myself was underpaid on both federal and state taxes this year. I ended up getting a $30 penalty for federal but nothing for state (AZ in my case).

If you don't like the idea of paying quarterly payments, you can always increase the withholdings from your paychecks. You didn't say if your husband's second job was a W2 or 1099 job, but if he can't do withholdings on the second job, he could still increase withholdings on the first job to cover the taxes. They don't really care how they get their tax money, they just want it.

[mater-three]

Yes.

[jas]

absolutely