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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I made extra money this fourth quarter in self employment .

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I made extra money this fourth quarter in self employment . I have never done estimated taxes as I have extra taken out from my day job. I will owe more than 10% than last year. Should I do estimated taxes for the fourth quarter only?
Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and thanks for using JustAnswer.com. You don't need to do estimated tax payments so long as you pay at least what you owed last year in taxes. If your AGI is over $150,000 then you would need to pay in 110% of what you owed last year.

For example, say you have $5,000 withheld at your job. Last year you owed $4,500 and had a $500 refund. This year you had a $7,000 tax bill. However, you had $5,000 withheld. You withheld 100% of your last year's tax liability so you won't have an underpayment penalty.

So, no - you don't have to do estimated payments for the fourth quarter. If you have the money now, and are afraid you will spend it if you don't send it in to the IRS then of course fill out a 1040-ES and pay the estimated payment. Otherwise, so long as you have at least your prior years liability withheld, you don't need to make the payment.

You can CLICK HERE to read more.

Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a happy, and safe, New Years.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Customer: replied 4 years ago.

I make over 150 and do not have 110% taken out. My mistake. Do I need to do a quarterly estimated tax or am I going to be stuck with a penalty any way.

Yes, you would need to do an estimated payment and it's due by January 15th. You will submit your payment with form 1040-ES which you can get by clicking HERE.

I hope this helps. It's crucial to send in the 1040-ES with your payment, so please don't just send a check to the IRS. Make sure you write your social security number and the tax year on your memo line, that way you can prove you made the payment in the event that the payment doesn't get applied to the correct year (very rare, but does happen from time to time...)

Have a good night. Thanks for using JustAnswer.com and have a happy New Year.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site*
You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C and 2 other Tax Specialists are ready to help you
Thank you for the positive rating. Please remember me the next time you have a question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer

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