I'm self employed and when I have the contractor hours, I make good money, I'm faithful to set more money aside than I need for my taxes and I even set additional money in case I hit a "dry spell". Well, I'd been in a season of little work since October until mid-March.
Much of my savings intended to cover this type of period has been eaten up. My earnings in Q4 last year were low enough that I ended up getting a good tax refund, but that money has had to be used for general life.
Currently, I do have money set aside in my tax budget. The thing is, I think work is about to pick up and I expect to have full, 40 hour work weeks through the rest of the year, which should mean I'll be earning a fair amount of money this year. This means that my overall taxes for 2019 will be quite high. I use QB Self Employed and I have the money to cover what's estimated for this quarter, however,
I suspect since I'll have a sizable surge of income the rest of the year, when I go to file my taxes for 2019, it will look like I made an underpayment for Q1 and I'll be penalized by the IRS. I would normalize my expected, projected income, but at this time I do not have the cash to cover what I suspect to be my total, 1/4 tax burden for the entire year.
Is there something I can do to report a potentially low quarter, so that I can make a low tax payment for Q1 and not get penalized at the end of the year for an initial underpayment?
I'm asking regarding US, Federal Taxes but I also live in NC. If anyone has any advice for NC, I'd appreciate that too, but I'm not directly asking for that information. But, if someone has some additional details on how to handle this in NC, I'd appreciate a comment on it, or a referenced link.