Mid-year change to quarterly filing

Forum|Forum|1 year ago
August 28, 2024
2 replies
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I worked at a W2 job the first 7 months of 2024. Now I’m independent. I don’t expect to earn a lot of revenue this first year; however, I will have CDs maturing and other interest income during this second half of 2024. My question is — if I have paid enough through withholdings Jan-July to cover the taxes on the rest of the year’s income, do I need to do anything at each quarterly deadline for this year? I do not want penalties for not paying on the interest income in the quarter it is earned. But I have prepaid. Thanks!

Best answer by Cindy4 12

If you have enough pre-paid to cover your entire year's income, you should be fine.

Congratulations on your move to independent contractor! We have some great tools available for estimating taxes due when working independently. Determine what to pay and when and how to make estimated payments.

You always want to keep in mind that your income tax liability will be based on your profit and you are responsible for both FICA- Social Security and Medicare - at a rate of 15.3% AND your income tax, which is based on your marginal rate.

Hope this helps!

Cindy

LoriLeighEA

Thanks for joining us today, aelfa!

Congrats on going Independent. Yes, it is important to estimate what your taxes will be at the end of the year. Your best course of action is to use a tax calculator - we have a great one. Put in all your projected income (including the W2 income for those 7 months), and the estimated interest etc. Include any tax payments already made including that withholding. This will give you a clearer picture of where you stand:

TaxCaster Tax Calculator

aelfaAuthor

Thanks! When I log in to TaxCaster, as a TurboTax customer, it just takes me to the "congratulations" page indicated I've finished filing for 2023. Is there some trick to using TaxCaster as an existing customer?