Who Does Not Pay Estimated Taxes?
If you're self-employed and also have a job you can avoid having to make estimated federal tax payments.
Current tax year
You do not have to pay estimated tax for the current tax year if you satisfy all three of the following conditions.
- You had no tax liability for the previous tax year.
- You were a U.S. citizen or resident alien for the whole year.
- Your previous tax year covered a 12-month period.
You had no tax liability for the previous tax year if your total tax was zero or you did not have to file an income tax return.
An employee who does not expect any other taxable income for the current tax year, other than his salary, and does not expect to owe $1,000 or more AFTER subtracting federal income taxes withheld and any tax credits, generally will not have to pay estimated taxes for the current tax year.
If you pay at least 90% of the current year's tax liability or 100% or the previous year's tax liability, you won't be required to pay estimated taxes.
For Freelancers and independent Contractors
- Organize your financial data into one central accounting system on the cloud
- Software kept up to date.
- Your data kept secure
- Anytime, anywhere data access.
- Pay your quarterly estimated taxes online.
- Export Schedule C to TurboTax at year-end for faster filing.
- Save up to 50% off QuickBooks Self-Employed. Track every deduction! Start your free trial now!
Have an accounting or bookkeeping question? Email it to me.
- Return to the Business Taxes Table of Contents to find related links