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In 2020 I want to start paying estimated quarterly taxes but I am not sure exactly how to calculate the amounts.

If I make X$ yearly income from my full time job have maximum withholding. I also expect to make additional $Y a year from my side gig as an IT consultant where I do not have much deductions.

Is it enough to pay (35% of Y$/4) of my additional income or do I have to sum up the entire income and then figure out quarterly payment? do I have to do the same thing for federal quarterly tax payment and State tax payments? Do you think this situation is complicated to need an accountant?

  • We have a progressive income tax system. It is impossible to estimate how much tax you might have to pay without knowing what your income is. – prl Feb 8 at 1:33
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    Of course. Look at form 1040-ES and the NY state equivalent. The 2020 1040-ES is not yet available, but the 2019 revision will be pretty much the same except for the tax brackets. – prl Feb 8 at 2:54
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    Instead of paying estimated taxes, another option would be to update your W-4 at your full-time job to withhold extra. – user102008 Feb 8 at 21:07
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    What @user4556274 said is incorrect. On the Self Employment Tax Worksheet, line 1a, you put only your self-employment income. You put your regular wages on line 6. On the Estimated Tax Worksheet, line 1, you include both your W2 income and your self-employment income, less the amount on line 11 of the Self-Employment Tax Worksheet. The amount from line 10 of the Self-Employment Tax Worksheet goes on line 9 of the Estimated Tax Worksheet. This instructions are on the worksheets and instructions. (I'm looking at the 2019 instructions. The 2020 instructions are probably the same, but may not be.) – prl Feb 9 at 3:16
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    The IRS doesn't care whether you fill in the worksheets or not; it only cares that you pay the right amount. If you think your estimate is within 10% of what your actual taxes will be this year, then it is a reasonable estimate. The interest rate for underpayment is actually fairly reasonable (currently 5%), and it is only applied to the amount of underpayment, so it's not too big a deal to be off somewhat. – prl Feb 11 at 0:03

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