Aug 30, 2023
We’re inching closer to the end of summer, and as much as we want to hold onto the warm weather and beach days, we also have to keep an eye on our financial responsibilities. For self-employed individuals, freelancers, and others who don’t have taxes withheld from their income, September 15, 2023, is a crucial date. Why? It’s an important tax deadline, the due date for your third quarter estimated tax payment for 2023.
Who Should Be Concerned?
Self-Employed Individuals: If you are your own boss, you likely need to make estimated tax payments.
Freelancers: If you’re paid on a per-project basis and no taxes are withheld, you fall into this category.
Investors: If you have significant income from investments, you might also need to pay estimated taxes.
What You Need to Know
Due Dates: This is the third of four deadlines throughout the year. The others are typically April 15, June 15, and January 15 of the following year.
Amount to Pay: The IRS expects you to pay at least 90% of the total expected tax for 2023, or 100% of the tax shown on your 2022 tax return (110% if your adjusted gross income is more than $150,000), split into four equal payments.
IRS Form 1040-ES: Use this form to calculate your estimated tax. You can find worksheets in this package to help you determine the amount.
Payment Methods: You can mail a check with a voucher, pay over the phone, or make a payment online via the IRS website.
Penalties: Failure to make timely and sufficient payments can result in penalties. It’s better to overestimate than to underestimate your tax obligations.
How to Prepare
Review Financial Records: Take a look at your income and expenses. It might be different from what you estimated at the start of the year. Adjust accordingly.
Check your Mileage Deduction Opportunity: if you’ve been using MileageWise, you can create an IRS-prrof mileage log in just 7 minutes! Don’t miss out on the opportunity of claiming $1000s!
If you haven’t been using MileageWise, you can still take advantage of its unique features to create your IRS-proof mileage logs retrospectively! Got Google Timeline records? Import them into the software and let MileageWise do the magic! Got some records in your Excel file, but there are still trip-gaps? Let MileageWise help you turning them into IRS-proof logs.
Speak to a Tax Advisor: Tax laws are complex and can change. It’s always a good idea to consult a tax advisor to understand your obligations fully.
Set Reminders: Use digital reminders to ensure you don’t miss future tax deadlines.
Paying estimated taxes might feel like a burden, but it’s an essential part of financial planning and legal compliance. Circle September 15 on your calendar, and get your numbers in order.
Best of luck!
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