Question: What Are Estimated Quarterly Taxes?
Estimated quarterly taxes are taxes paid throughout the year rather than all at once in April of the following year. While they are often referred to as quarterly taxes, the due dates are not actually at the beginning of each quarter but rather on these dates
. These estimated taxes are paid by people working for themselves who do not have tax withheld automatically from the company they are working for.
There are two main benefits to paying quarterly taxes:
- If you fail to pay the proper amount of estimated tax throughout the year, you may face penalties.
- Paying taxes 4 times during the year avoids one large payment in April, making it much easier to manage your money.
Graphic designers working independently as freelancers or running their own design business should pay estimated quarterly taxes to avoid these penalties and large payments at the end of each year. These estimated taxes are based on your income from the previous year or estimated income from the current year.
For detailed instructions on how to pay these estimated taxes, visit About.com's Tax article on how to pay estimated taxes