I get questions fairly frequently about quarterly taxes. Who is required to file them? And why? Since the second quarter filing is coming up and I’m busy helping my clients get these done, I’ll make this short and sweet.
In general, if you either owed more than $1,000 last year in taxes, or expect to owe more than $1,000 this year, you are required to file quarterlies. Often, this is because of self-employment (working as a contractor or owning your own business). If you are on someone’s payroll (say, you do consulting work on the side but have a day job), you can avoid paying quarterly taxes by adjusting your payroll tax withholding. If not, you can figure out what you owe by going to this worksheet. I would say that, if you’re on the fence, pay something. You can usually avoid paying an underpayment penalty at the end of the year if, when you file your 2012 taxes, you owe less than $1,000 or if you have paid in the same amount that you owed last year.
Quarterly taxes are set up in a weird way (don’t ask me why — if I ran the world, the IRS would look A LOT different):
- January 1 through March 31 (aka the first quarter) is due on April 15.
- Here’s where it gets strange… the “second quarter” is April 1 through May 31, and that payment is due June 15.
- June 1 through August 31 is the third quarter, with a payment due September 15.
- September 1 through December 31 is the fourth quarter, with a payment due January 15.
So: if you owed last year, or you work for yourself, and you haven’t filed quarterly taxes yet this year — get started. And if you’re not comfortable with doing it yourself, contact a tax professional or an accountant.