Yes - most 1099 contractors are required to pay “estimated” taxes, every 3 months. It’s not as scary as it sounds, and Keeper is here to help. Our tax saving software for freelancers will take you by the hand and show you what you need to do to avoid penalties.
Most independent contractors are required to pay estimated taxes or 1099 quarterly taxes. There are two exceptions:
If you wait until the end of the year to file taxes, you’ll have to pay a penalty. It’s not huge, but it’s not nothing.
In 2018, it was around 5% of your total tax payment. Breaking it down, that’s about $150 for every $10,000 earned as a 1099 contractor (assuming a standard 30% effective tax rate).
As long as you’re tracking your income and tax write offs, it’s actually quite simple! You’ll just make a payment online. The formula is essentially your income in the past three months, subtract your tax write offs, and multiply by your effective tax rate (approx. 30%).
In 2019, estimated taxes are due on the following dates:
Keeper finds tax deductible expenses among your purchases ... automatically! Save $1000s a year claiming the tax write offs you’re eligible for as a contractor.