Tax Expert Explains Quarterly Taxes for Self-Employed
Tax preparation expert Josh Adams clarifies quarterly tax obligations for the self-employed in a HelloNation article. The piece emphasizes estimating income and making payments four times a year.
Josh Adams, a tax preparation expert based in North Chesterfield, Virginia, has provided guidance on quarterly tax obligations for self-employed individuals in a recent article published by HelloNation. Many self-employed individuals find the system of estimated taxes unfamiliar, as income is not subject to automatic withholding like traditional employment.
The HelloNation article explains that both the IRS and Virginia tax authorities require estimated tax payments four times annually if the expected tax liability exceeds a certain threshold. This necessitates that self-employed individuals accurately estimate their annual income, calculate their total tax owed, and divide this amount into four equal installments throughout the year.
Adams highlights that understanding the rhythm of these payments simplifies the process. The IRS offers Form 1040-ES, and Virginia provides Form 760 ES, to assist taxpayers in calculating their estimated taxes. Many self-employed individuals opt for online payment methods, utilizing services like IRS Direct Pay and the Virginia Department of Taxation website for convenience and confirmation.
The article underscores the importance of consistent record-keeping and timely payments to avoid penalties and large year-end tax bills. By establishing a steady routine and adhering to the quarterly deadlines, typically in April, June, September, and January, self-employed individuals can manage their tax responsibilities more effectively and reduce financial stress.