Got a Side Hustle? Here's How To Calculate Quarterly Estimated Taxes
If you have a side gig, you most likely don’t pay taxes on what you earn. If you filled out a W-9, or are receiving payments via Venmo or another app, taxes aren’t being taken out of your earnings for things like federal income tax and Social Security and Medicare taxes.
Instead, you’ll pay quarterly taxes. Generally, you must make estimated tax payments if you expect to owe more than $1,000 when you file your income tax return and you are self-employed, you’re an independent contractor, you receive dividend income, you work as a freelancer, or you have gambling winnings.
Quarterly Tax Deadlines
Quarterly tax due dates are the following. You can set up a reminder in your calendar so you don’t forget.
April 15
June 15
September 15
January 15 (of the following calendar year)
How To Determine How Much You Owe for Federal Taxes
Rob Burnette is an investment advisor representative and professional tax preparer at Outlook Financial Center. Burnette said the exact amount you pay will vary based on what you earn.
“For the self-employed, they should look at their profit-loss statement for the time period to determine the amount of net self-employment income,” he said.
To determine what your federal income tax will be, Burnette said to look at your marginal tax rate based on income. The 2026 rates can be found on the IRS’s website.
Burnette added that you’ll also owe FICA payroll tax. This is a fixed number of 15.3% of your earnings.
How To Pay Your Federal Taxes
To pay your federal taxes, you can go to IRS.gov. There, you can set up an IRS online account to pay estimated taxes and any other payment you might need to make to the IRS. The button to "Create Account” is the first thing you see on the page.
“Setup is straightforward and will require you to set up an ID.ME account for identity verification unless you already have one. The online IRS account connects to your bank account for payment of the amount and on the date you specify,” Burnette instructed.
What Happens If You Don’t Pay
Not paying your quarterly taxes can be more expensive than if you paid them in the first place. Burnette said that if you don’t make quarterly estimated payments, the IRS may assess an underpayment penalty. You can technically pay your taxes as a lump sum at the end of the year, but you’ll be fined if it isn’t enough to cover your total tax debt.
How To Determine State Taxes
In addition to your federal tax, most states will require you to pay a quarterly tax, as well. The only states without an income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in any other states, you’ll have to pay a tax. You can set up an account with your state tax board and pay the amount that corresponds with your income and state tax rate.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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