Gavin Larnard | Tax and Finance

Here's how to set up and pay quarterly estimated taxes:

WHO NEEDS TO PAY

Self-employed, freelancers, 1099 contractors. Anyone with income that doesn't have taxes withheld.

If you expect to owe $1,000+ in taxes for the year, you're required to pay quarterly.

HOW TO CALCULATE YOUR PAYMENT (SAFE HARBOR)

Take your TOTAL tax bill from last year's return (Form 1040, Line 24). Divide by 4. Pay that amount each quarter.

This guarantees no underpayment penalty even if you owe more at filing time.

If your income was over $150K last year, use 110% of last year's tax instead of 100%.

HOW TO PAY

Go to irs.gov/payments.

Choose "Pay Estimated Tax."

Select "1040-ES Estimated Tax."

Pay via bank transfer (free) or credit/debit card (small fee).

SET UP AUTOPAY

Register at eftps.gov (takes about a week to get your PIN by mail). Schedule recurring payments on each quarterly due date. Set it and forget it. No more missed deadlines.

Don't forget STATE estimated taxes too. Most states with income tax require separate quarterly payments. Check your state's tax authority website.

Are you paying quarterly or waiting until April and getting hit with penalties? Drop your system in the comments. If you're still guessing, this is your sign to set up safe harbor today.

Follow @gavintalkstaxes for more.