People who are self-employed are required to send in quarterly estimated tax payments since tax is not withheld from their wages as it is for employees.12 But if your income varies from month to month or year to year, it’s tough to determine the amount to pay. You don’t want to send in so much that your daily expenses suffer or so little that you get slapped with a shocking tax bill at tax return time, not to mention underpayment penalties.
The following tips will help you calculate your quarterly estimated tax payments to minimize your chances of incurring penalties or breaking your budget.
