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I worked as an Independent Contractor (for the first time ever) during September and October which means that I owe quarterly taxes that are "due" on January 15th.

I also worked as a full-time employee and will be filing taxes for that too.

Do I have to pay the quarterly earnings tax by Jan 15th or can I just pay it when I file my taxes?

Also, if I pay them right now, how will I tell TurboTax that I have already paid the quarterly earnings tax when I file my annual income tax?

  • To be clear: you don't file one return for W-2 employment and a different one for self-employment; you file one return with everything combined, although some parts of that return, like schedules C[-EZ] and SE, distinguish between the different types of income. – dave_thompson_085 Jan 15 at 5:13
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From the IRS:

How do I know if I have to file quarterly individual estimated tax payments?

Answer:

Generally, you must make estimated tax payments for the current tax year if both of the following apply:

  • You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
  • You expect your withholding and refundable credits to be less than the smaller of:
    • 90% of the tax to be shown on your current year’s tax return, or
    • 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

There are special rules for:

  • Farmers and fishermen
  • Certain household employers
  • Certain higher income taxpayers
  • Nonresident aliens

Estimated tax payments are a way to ensure that you don't incur an underpayment penalty when you file your annual tax return. Since you already have a "W-2" job you most likely have taxes withheld through that, which might cover the 90% of current-year tax or 100% of last year's tax due.

If you aren't able to make those calculations yourself and/or don't want to spend money on a tax advisor, you could just send 25% of your extra income as an estimated payment - at worst you'll get it back as a refund when you file your annual taxes.

As far as TurboTax goes, it should ask you a question at some point in the interview about estimated tax payments. If it doesn't (or you didn't recognize the question properly), look under Estimated and Other Income Taxes Paid in the outline.

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    Almost all this information is spot on. My only suggestion is that 25% may be too low. At the minimum you will want to use the % of whatever tax bracket you are in, and even then you may want to add a little more to that because as an independent contractor, you will be responsible for both sides (employer and employee) of the employment tax. Also, if don't forget to check if your state also will require an estimated tax payment. – R. Hamilton Jan 14 at 18:37
  • Any overpaid estimated taxes is an interest-free loan to the government. Any underpaid estimated taxes is a loan from the government to you (on the minimum amounts and latest dates you needed to pay to avoid a penalty) for which you pay an equivalent yearly rate of around 5%. – David Schwartz Jan 14 at 20:52
  • For Q4 there's a special case, hinted at in the FAQ item two above the one you link. If you file and full-pay by Jan. 31, that replaces the Jan. 15 estimated payment. You keep some (perhaps most) of your money a whole 16 days more, big whoop. – dave_thompson_085 Jan 15 at 5:19
  • Also note that the "100% of last year's tax" becomes 110% of last year's tax if your AGI last year was above $150,000 – user102008 Jan 17 at 7:58

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