There’s one date each year that sticks out to American taxpayers everywhere: April 15. But to another group of people -- the ones who make quarterly payments -- there are three other times a year to pay up.
Quarterly taxes are often how self-employed individuals, freelancers and independent contractors pay up.
So, how do you know if paying quarterly is right for you, or when it might be time to switch to doing so?
Paying quarterly taxes
According to the IRS, the time to make quarterly estimated tax payments is if both of the following apply:
1. You anticipate owing at least $1,000 in taxes for the current tax year, after subtracting your withholding and refundable credits.
2. You expect your withholding and refundable credits will be less than the smaller of:
- 90% of the tax to be shown on your prior 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.)