IRS tips: Small businesses, self-employed should make quarterly payments
Monday, November 12, 2018
With the last third of the year now in full view, the IRS reminds small business and self-employed taxpayers of the importance of meeting their tax obligations. Part of those obligations normally include making quarterly estimated tax payments.
This is the third in a series of four news releases aimed at helping taxpayers pay the right amount of tax and avoid an estimated tax penalty. This is part of the wider Paycheck Checkup campaign to encourage people to check their tax situation, including withholding and estimated tax payments.
Who may need to pay estimated taxes
Individuals, including sole proprietors, partners and S corporation shareholders, may need to pay quarterly installments of estimated tax unless they owe less than $1,000 when they file their tax return or they had no tax liability in the prior year (subject to certain conditions).
Other taxpayers who may need to make estimated payments include someone who has more than one job but doesn’t have each employer withhold taxes; is self-employed; is an independent contractor; is a representative of a direct-sales or in-home-sales company; participates in sharing economy activities where they are not working as employees.