Quarterly Tax Payments?

Question

I'm a student who is working a few jobs (2 of which use 1099's). Last year (2006 tax year) I brought in about a $17 tax refund.

I'm planning on paying quarterly tax payments but won't start the new jobs until next week. Are you able to start making quarterly tax payments anytime and is there a penalty for starting late?

I was thinking that the IRS wouldn't care as long as they received their money prior to/on tax time. I'm completely open to any recommendations or suggestions you may have. Thanks in advance for your help you can provide!

Answer 1

Normally quarterly tax payments would be due 4/15, 6/15, 9/15, and 1/15 of the following year. Since you won't be starting the new jobs until next week, you don't have to worry about the 4/15 payment. Also, what the IRS says for quarterly payments is that they have to be either 100% of your prior year tax (110% if your income was high enough) or 90% of the current year tax (awfully hard to figure out since you don't know how much you will make until the year is over). If the tax liability you have for the year is less than $1,000 than you can pay the entire amount by 4/15 with no penalties.

Answer 2

You don't have to start making quarterly payments until you have an income. The real goal for you is to make sure that your FINAL quarterly payment for the year (Jan 15, I think), is enough to cover your tax liability for the year. If you reach this goal, you'll likely never get looked at for the others, though you should probably follow the rules on those as well.

Because you had a refund last year, I don't think you can be penalized at all this year, but if you were smart, you would set yourself up to NEVER be penalized. Make sure that each year you get at least a small refund as a guard against a future error.

(Judy above is correct about the 1099 income. Don't forget to take that into consideration as part of the taxes due.)

(Michael's suggestion above is common. You can claim single and zero on your W-4 and add to that an additional deduction from your wages, but it's hard to guess how much to add to cover your 1099 income. If single-one normally applies to you, just claim that and add in your estimate of what you would make in quarterly payments, and you can skip the extra payments altogether because your employer is doing it for you.)

It might be a good idea if once or twice during the year you just estimate what you'll have in income for the whole year and add up all the deposits you've already made. Then fill out a fake 1040 form for practice and check the 2006 tax tables to see where you stand. This gives you benchmarks through the year to see how close you are.

Answer 3

Hi
the first thing to do is to think how much of your income is income then go to the IRS website look over pub 17 and if you have not made the income nothing to report next you have to understand the quarters this is mostly for those with a business who do quartley taxes you should use estimated taxes becaues that give you an idea of what you may have to pay on self employment tax and you still can estimate what you may make so at the end of the year you have already sent in some of the taxes you think you may have to pay if it is less at the end of the year then you will get a refund but quartly taxes is not for you go to www.irs.gov look up estimated taxes for individual and you will see the work sheet then you fill that form out and send it to IRS then every 4 mths you take a payment to the bank with the payment voucher take a look you will be glad you did

Answer 4

If you're working on 1099's and have more than $400 income on those, you'll owe 15.3% on the net from them for self-employment tax.

As far as quarterly payments, the first quarter deadline is past, so just pick up with the second quarter - it will say that on the 1040ES coupon you include with your payment. If you send a first quarter coupon, but it's late, there would be some chance they'd try to charge you a penalty - better to just forget about the Q1 coupon and start with Q2.

Answer 5

Am I correct in reading that you have at least one job that pays W-2 type income? If you do, you can have that job withhold extra to cover the amount that you would sent as quarterly payments. If you do, you don't have to send quarterly payments as such.

As others have said, if you did not have income for which quarterly payments should have been made during the 1st quarter (Jan-Mar), you don't need to worry about a first quarter payment.

Answer 6

Taxes are due when the income is earned. Since you have not yet started the job(s), no tax is currently due. Start making the estimated payments once you start working. Making the June 15 payment your first payment for the year will be fine in your case.

Answer 7

You may want to check the circumstances. If the property was inherited the basis is the FMV on the date of death of the deceased. The only gain would be from that date to the date of sale which would normally be resolved with the cost of sale. There would not be a chart as there would be a number of circumstances involved in determining the tax most of which you have not included.

Answer 8

Your employer is required to withhold for taxes based on your W4 form. If you don't have any other income and you fill out the form, as required by law, correctly then the withheld amount should be close to your actual tax liability. There is no option to have your employer not withhold for taxes.

If you have additional income, or something very unusual, such that additional taxes will be due then you can REDUCE your number of exemptions on your W4 so that additional taxes will be withheld.

Another option, for this additional income, is to make quarterly payments via form 1040ES. If the payments are not the same all year, file form 2210 with your 1040 to show that your tax payments for each quarter were in line with your income for that quarter. If you don't file 2210 they might charge you a penalty for not paying taxes in the earlier quarters.

Answer 9

My friend, based on your two questions, you really should go see a tax professional before you start sending money to the IRS or anybody.