I've been doing this since 1989. Some good news: the first year you're required to do this, they don't penalize you for not doing it right.
There are two ways to figure estimated taxes: 1) Do all the math and worksheets and figure out what you're really going to owe (as if you know that in advance--really!) then divide into the 4 equal parts and pay on the due days.
2) Just pay what you owed the year before, divided into 4 parts and paid on the due dates. This way is much easier, and will be available to you the second year you have to do it. This will avoid penalties and interest, even if you owe more than you paid in est. taxes if you file by April 15th. (If you make lots more this year than last, I think 50,000 more, then you have to pay 110% of the previous year's taxes in order to avoid penalties and interest, but this is unlikely to apply to you--I've never had it apply to me, even.) This is the easier option that I use, and I recommend it.
And BTW, once you've made estimated tax payments for one year, they'll send you the forms and envelopes with your name already pre-printed on them for the next year.
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timeasmymeasure
Estimated taxes paid quarterly
Date: 2005-06-04 03:51 am (UTC)There are two ways to figure estimated taxes: 1) Do all the math and worksheets and figure out what you're really going to owe (as if you know that in advance--really!) then divide into the 4 equal parts and pay on the due days.
2) Just pay what you owed the year before, divided into 4 parts and paid on the due dates. This way is much easier, and will be available to you the second year you have to do it. This will avoid penalties and interest, even if you owe more than you paid in est. taxes if you file by April 15th. (If you make lots more this year than last, I think 50,000 more, then you have to pay 110% of the previous year's taxes in order to avoid penalties and interest, but this is unlikely to apply to you--I've never had it apply to me, even.) This is the easier option that I use, and I recommend it.
And BTW, once you've made estimated tax payments for one year, they'll send you the forms and envelopes with your name already pre-printed on them for the next year.