amyb56•5mo ago

Tried to do my own quarterly taxes for the first time and it was a mess

Honestly, I thought I could handle my estimated taxes myself this year. I made about $15,000 in freelance writing work last quarter and used a free online calculator. I sent in what I thought was the right amount, $2,200, to the IRS. Got a letter last week saying I underpaid by almost $400 because I completely messed up the self-employment tax part. I just did the income tax and forgot the other half. Ngl, it stressed me out for a whole afternoon fixing it and paying the extra plus a small penalty. I learned that the tax stuff is way more tricky than just setting aside a percentage of my pay. Has anyone else had a surprise like this their first time? What tool or method do you use now to get it right?

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4 Comments

butler.laura5mo ago

Agree with @brianmurray, that part always trips people up.

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brianmurray5mo ago

You forgot the self employment tax part, right?

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jessica9215mo ago

Yeah that's a big chunk. Set aside a quarter for taxes right off the top.

9

simon_carr3mo ago

Honestly the self employment tax is brutal but what really gets people is they forget about state taxes on top of it. @jessica921 said set aside a quarter and that's close but depending on where you live it could be more like 30 to 35 percent. People also miss the fact that you pay both halves of social security and medicare which adds up fast. And if you don't pay quarterly estimates the IRS hits you with penalties at the end of the year. So set aside a bigger chunk than you think you need and you'll be fine.

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