Estimated taxes (aka quarterly taxes) must be paid to the IRS by any self-employed person or small-business owner who makes over $1,000 a year. If you were an employee, these taxes would already be taken out of your paycheck and sent to the IRS by the company you work for. Since you’re in business for yourself, paying these taxes is now up to you.
Quarterly estimated taxes can be figured out several different ways, but here are the two easiest:
Get out the calculator. Each quarter you’ll need to sit down and figure out the amount of money you’ve made over the last four months (your gross earnings). Your estimated tax is 15% of your total.
Have Outright do it for you. Outright gives you an instant estimate of your quarterly taxes. It shows you how your quarterly payment is looking any time you want, it shows when your next payment is due, and it keeps a record of your payment history.
Now that you’ve figured out how much you owe, it’s time to make your payment. Here are the ways you can do it.
Mail in your payment. Go to the irs.gov website and search for Form 1040-ES. Download and print the the form, and you’ll find it includes four payment vouchers. It also provides a mailing address and payment due dates.
Pay online or by phone. Use EFTPS (Electronic Federal Tax Payment System) to make payments online or by phone. It’s a government-provided system that’s safe and free. Start by enrolling at eftps.gov.
Outright makes taxes easier for small-business owners by categorizing your transactions in the way the IRS expects, instantly showing what you owe in estimated quarterly taxes, automatically filling out your Schedule C, and emailing you alerts of upcoming tax deadlines.