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by fliph 5731 days ago
To supplement the comment I left regarding TurboTax (http://news.ycombinator.com/item?id=1783200), I thought I'd lay out exactly how and when I interact with the IRS. About 50% of my income comes from freelancing; the other 50% from a full-time job.

January 15: Send the IRS a check for 28% of the gross freelance income you made between September 1 and December 31 of the previous year along with a 1040-ES (http://www.irs.gov/pub/irs-pdf/f1040es.pdf) Also send an estimated payment to your state of about 5-7%, based on your state's income tax bracket for your income. (My state, Minnesota, has easy online payments, so there's no paperwork required.)

Between March 1 and April 15: Do your taxes. Use TurboTax; it will simplify your life. Take appropriate deductions for everything that TurboTax asks, but make sure to have documentation.

April 15: Repeat what you did on January 15, but for income received between January 1 and March 31.

June 15: Repeat January's step again, but for income from between April 1 and May 31.

September 15: Repeat January again, but for income from between June 1 and August 31.

Note that you only really need to make estimated payments if you expect to owe more than $1,000 on tax day if you were to not make estimated payments. If you owe more than $1,000 when tax day comes, you may be charged a penalty if you didn't make estimated payments. (I'm not an accountant, so your mileage may vary.)

1 comments

Where did you come up with the 28% figure for your estimates?
Based in part on the tax brackets shown here: http://www.moneychimp.com/features/tax_brackets.htm and several years of adjusting my estimated taxes in order to get as close to a zero-balance as possible when I do my taxes in April.