Estimated Taxes: Quarter Pounder – Napkin Finance

Estimated Taxes
Quarter Pounder

June 25, 2020
Estimated Taxes

If you’re a freelancer, Uber driver, online yoga instructor or are otherwise self-employed, you probably have to pay estimated taxes. Due once a quarter, estimated taxes include state and federal income taxes plus Medicare and Social Security.

In a typical year, you’ll owe federal estimated taxes on April 15, June 15, September 15, and January 15. But since 2020 is anything but typical (looking at you, coronavirus), the government pushed back the Q1 and Q2 deadlines to July 15. That means you still have a few weeks to get your payments together—but it also means you’ll need to cut a super-sized check in July.

Don’t forget about state taxes, though. The deadlines where you live may vary from the federal schedule, but the quarterly requirement remains the same. If you’re not sure when to pay or where to submit your payment, call your state department of revenue.

How much do you owe?

There are two ways to figure out your estimated taxes:

  1. If you expect your income to be the same as last year, divide the amount you owed previously into four payments.
  2. If you expect your income to be different from last year, forecast your quarterly income— then consider your income tax bracket plus the 15.3% self-employment tax. (Don’t forget to factor in business deductions!)

Learn more about estimated taxes and how to calculate them.

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