Many people are required to pay quarterly taxes as opposed to a single payment in April. Self-employed individuals such as independent contractors and business owners are most commonly required to file estimated quarterly taxes. Quarterly taxes are due April 15, June 15, Sept. 15 and Jan. 15. To determine the amount of taxes you owe each quarter, take the amount of your tax burden for the previous year and divide that number by four. You can send the money to the IRS via check but it is far simpler to automate the process and have the payments deducted directly from your account.
Look at last year's tax return. Find the line that lists your tax liability for the previous year. If you were using form 1040, this is line 63.
Divide the amount of your tax liability by four. This is your quarterly estimated tax.
Set up an online payment account with the IRS by going to the website of the Electronic Federal Tax Payment System (see Resources).
Link your bank account to your IRS payment account.
Set up your quarterly payments on the IRS electronic payment site for the amount you determined in step 2.
Items you will need
- Copy of previous year's tax return
- Bank account
- If you estimate the amount of taxes accurately, you will owe no tax. If you overestimate the amount of taxes you owe, you will receive a refund. If you underestimate the amount of taxes you owe, you will receive a tax bill.
- Make sure you have enough money in your account to cover your tax payments when the payments are made.
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- Can One Make Payments to the IRS on Taxes Owed?
- How Can I Calculate How Much Taxes I Will Pay Next Year?
- Penalty Calculation for Underpayment of Estimated Taxes
- How to Read an Escrow Analysis Statement
- How to File Taxes As a Consultant