Tax season is just around the corner, so people are advised to prepare their budgets. Fortunately, there are available tools that can help estimate taxes and process papers online. These tools can be useful to self-employed workers, freelancers, small business owners and other taxpayers.
Most traditional jobs withhold a percentage of income tax from employees' salaries. These companies then pay the federal tax on behalf of those employees. However, this system does not apply to self-employed taxpayers. These people are required to calculate and comply with their tax payments on their own.
Note that taxpayers can pay their income on a quarterly basis. This is to reduce the burden of paying a lump sum on tax day. Cnet revealed a few strategies to compute estimated tax for self-employed citizens.
Do You Need to Pay Estimated Tax?
According to the IRS, anybody who earned at least $1000 in 2021 must pay taxes. Some known employment types that fall under these categories are:
- Corporation shareholder
- Independent contractor
- Freelancer
- Sole proprietor
Be warned that the source income for the eligibility also includes people who earn from:
- Dividends and interest earned from investment sales
- Royalties for past work
- Landlord rental income
- Alimony
- Unemployment benefits
- Retirement benefits
- Social Security benefits, if you have other sources of income
- Prizes and awards
So anybody who falls under this category should prepare for the tax deadlines this year.
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Estimated Taxes Due Date: 2022 Schedule
As previously mentioned, taxpayers can pay for their dues quarterly, on the 15th day of January, April, June and September. If the 15th falls on a legal holiday or weekend, then taxpayers can file their tax returns on the next workday. Following this outline, the deadlines for 2022 estimated taxes are:
- January 18
- April 18
- June 15
- September 15
- January 16
How to Compute for Estimated Taxes: Tax Calculator 2022
Taxpayers who are planning their budgets can use two online tools for help. These are the Tax Withholding Estimator and Estimated Tax Worksheet.
The IRS Tax Withholding Estimator will help people budget their taxes for a fixed salary, hourly job or pension payment. The amount computed prevents payers from paying too little and facing an unexpected bill on tax day. It will also take into consideration a change in status like getting married, birth of a child or getting a new home.
To use the tool, taxpayers should visit the IRS website. (NOTE: at the time of writing, the website is undergoing temporary maintenance. Services might come back later this month).
The second tool is an Estimated Tax Worksheet, which should be helpful to taxpayers with no clear monthly income. It will give a rough estimate of a person's tax payment based on their "threshold amount." The details of this document are found on the second half of this website.
After completing all these papers, taxpayers can sign up to the IRS.gov website to complete and submit their payments.
