Do freelancers must file their taxes quarterly?
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Expert
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Expert
Yes, freelance, or "self-employed" individuals do need to file quarterly taxes. There are 4 due dates: April 15, June 15, September 15 and January 15 of the following year. The amount you need to pay would be either 100% of what you paid in taxes for last year's return, or 90% of what you are projected to owe for the current year. Either of these 2 percentages would help you to avoid paying a penalty for not withholding enough. If you have 2 or more jobs, however, you could raise the withholding at the regular job, as long as it was enough to cover both places of employment's tax liability. Being a freelancer actually can create a few more difficulties, such as paying self-employment taxes. Home office and other deductions might be able to help you reduce some of your potential tax liability.
Expert
If a freelancer expects a tax amount due (over $1000) at the end of the year, the IRS requires quarterly tax deposits during the year to cover that tax amount due. In order to project the tax liability one most likely will require to retain a professional for that, normally a CPA. Additionally, there may be payroll tax returns and taxes due that must be filed quarterly on federal, state and sometimes local levels. In order to avoid penalties one must treat quarterly tax deposits with utmost importance.
More details on safe harboring and tax deposit requirements here:
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
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I agree 100% with both of the tax experts listed above.
If you are in need of more in depth discussions of any personal issues that were not listed here that may have an impact of your unique situation please feel free to call me anytime.
Thank you,
Paul Dolnier
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