Connect with us

Buy Black All Year Long

Estimated taxes for 2022: What they are, who needs to pay them and when they’re due


Estimated taxes for 2022: What they are, who needs to pay them and when they’re due


If you have a traditional job, your employer likely withholds income tax from every paycheck. But if you’re among the millions of small business owners, freelancers, gig workers and other self-employed taxpayers, there is no automatic mechanism for withholding your tax payments throughout the year. Instead, you’ll be required to calculate and make these payments on your own.

Although the estimated tax filing process is a bit more complicated, the IRS has a method to help you avoid paying off one huge bill on tax day. Here’s everything you need to know about estimated taxes. 

What are estimated taxes?

If you earn or receive income that isn’t subject to federal withholding taxes throughout the year — side hustle earnings or income from a rental property, for example — you’ll pay as you go with estimated taxes. Estimated tax is a quarterly payment based on your income for the period. Essentially, estimated tax allows you to prepay a portion of your income tax every few months to avoid paying a lump sum on Tax Day. 

Who has to pay estimated taxes?

If you filled out the IRS W-4 form, which provides directions for your employer about how much to withhold from each paycheck, you might not need to pay estimated taxes. If you aren’t a W-4 salaried employee, however, you probably need to keep estimated tax payments on your radar. According to the IRS, you must pay estimated taxes if you expect to earn at least $1,000 in 2021 and your employment type falls into one of these categories: 

Independent contractor or freelancerSole proprietorPartnerS corporation shareholder

There are other sources of income that fall under the estimated tax umbrella, including:

Source link

Click to comment

Leave a Reply

Your email address will not be published.

Bitcoin Video Course
360 Virtual Video Tour
Rich Dad Summit
Regal Assets Banner

Facebook BlackEconomic

Moocow Moolah

Popular Posts

To Top