Incomplete quarterly estimated payment

Forum|Forum|2 years ago
October 5, 2023
1 reply
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I reside in California and I was an employee the first three months of 2023, so my employer was withholding taxes from my paycheck. I retired in April 2023 and I got taxes withheld from my Social Security payments. All the money withheld covers my taxes for 2023, so I didn’t need to do quarterly payments to the IRS.

However, I will start working as an independent consultant in October, so I won’t have taxes withheld from my consultant income. Given that this work opportunity has just happened and was not planned earlier in the year, I couldn’t estimate taxes to do quarterly payments.

1) Should I just make the last 2023 quarter payment in January 2024 to both federal and state?
2) If I do that, could then be penalized because I didn’t do the other three quarterly payments?
3) Also, the 15% self-employment tax is just added to the estimated payments and paid all together, or it is paid separately in a different way?

Thank you for your help

Bsch4477

Employee

1.. Make your estimated payment to cover your self employment tax in January.
2. You won’t be penalized since you can show that your payment was made in the same quarter as your increased income.

3. On your return your withholding and estimated payment will be added together and applied toward your total income tax liability including your self employment tax.