You're expected to pay quarterly taxes if you're self-employed.
If you work as an independent contractor or freelancer on a 1099, then taxes aren't taken out of the money you're paid, which means you're responsible for paying both your federal and state taxes.
Who needs to pay quarterly taxes?
Here’s a general rule-of-thumb from the IRS for determining if you should be paying taxes quarterly:
If you expect to owe more than $1,000 in taxes for the year for your independent contractor or freelancer work (which is around $3,000 or more in profit), then you should consider paying quarterly taxes.
What amount do you pay?
Quarterly taxes are estimated taxes.
You pay what you think you owe each quarter, and then you settle up with the IRS in your annual return, either by paying the rest of what you owe or by receiving a refund.
Catch will help you stay prepared for quarterly taxes, but it’s up to you to determine exactly what you owe the IRS each quarter. Here are two forms you can use to calculate and file quarterly taxes:
Schedule C: Input your 1099 income plus any related expenses. This total is then subject to self-employment taxes, federal income tax, and state income tax. The Schedule C isn’t required for paying quarterly taxes, but it’s helpful to have. More info here.
Keep in mind, even if you make estimated tax payments, you may still owe taxes when filing your return at the end of the year.
When do you pay?
Here are the quarterly tax deadlines for income earned per year:
IRS Due Date
Apr 18, 2022
Apr 13, 2022
Q1 estimated tax (Jan-Mar)
Jun 15, 2022
Jun 10, 2022
Q2 estimated tax (Apr-May)
Sep 15, 2022
Sep 12, 2022
Q3 estimated tax (Jun-Aug)
Jan 17, 2023
Jan 11, 2023
Q4 estimated tax (Sep-Dec)
*If you're withdrawing from your Catch account to pay on your own, we recommend factoring in at least 3 business days for processing time. Better safe than sorry.
How do you make a quarterly tax payment?
There are three ways to submit your tax payment:
Catch: Payment can be sent directly to the IRS from the funds you have saved in your Tax Plan with Catch. If you are submitting your payment through Catch, we recommend paying at least 24 hours before the IRS due date. See here for more details.
Electronic: Payment must be submitted by 8pm ET the day before the due date. This can be done via a system called EFTPS.gov.
Physical Mail: Payment should be postmarked on or before the due date. First, print and fill out a 1040-ES form for the corresponding quarter (for example: September 15th would be the Q3 Voucher). Then write a check to the United States Treasury for the amount owed. Finally send it to the nearest IRS mail center.
What happens if you don’t pay?
If payments aren’t made quarterly when due, you may have to pay a penalty.