How can I calculate my federal and North Carolina quarterly taxes for my freelance work?
Image taken on 2005-07-12 19:21:23 by Jackie Stephenson.
I have all the time (width – 2) as well as to work, or freelance (1099) on the working side. W my taxes have been arrested – two jobs are not being disclosed my freelance work. How, how much should I pay quarterly taxes (both federal and NC)?
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Tags: calculate, Carolina, federal, Freelance, North, quarterly, taxes, work
February 17th, 2010 at 1:30 pm
http://www.irs.gov
Look up 1040es. There will be instructions to calculate and complete the estimated tax forms.
Northa Carolina should have the same type of form. Browse the state website.
February 17th, 2010 at 1:46 pm
The best way is to compute your YTD profit each quarter, then annualize it. Pay your ES each quarter based on the annualized profit.
To avoid penalty, you can make sure you pay in (through 4 equal ES payments and withholding) 100% of your prior year tax or 90% of your current year tax. Doing that, however, will not ensure that you will not be under or over paid at tax time.
February 17th, 2010 at 2:39 pm
Cash is King, my friend!
February 17th, 2010 at 3:22 pm
The estimated quarterly payment forms are rather clear about how to do this.
Alternatively, you could increase your withholding at your W-2 job and thus avoid the estimated payments. Figure out how much more you need withheld. Start by claiming 0 on W-4, and you may need to add additional amounts withheld with each paycheck depending on the amount of freelance/self-employment income. Keep good records of expenses and mileage to reduce your taxable income when filing your Schedule C.