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March 22, 2021

I don't think my question posted. I have extra money taken for fed and state from my regular full time job to cover taxes for my side hobby/job. Have the rules changed and I now have to fill quarterly instead of yearly or I will get a penalty at tax time next year?

LenaH
March 22, 2021

No, the rules have not changed. The federal underpayment penalty generally only applies when you owe more than $1,000 in federal tax on your tax return. Per the IRS, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and estimated tax payments, or if they paid at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. If your extra withholding covers your self-employment/hobby income, then you should not have to make estimated tax payments. 

 

It is important to note that the amount for requiring state estimated taxes will depend on which state you reside in. Please comment below if you need additional guidance for your state requirements. 

 

@inky-rocketmail-

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March 22, 2021

Thank you so much for the information. I'm in New York. Will that make a difference?