I've been self employed since March but didn't realize I should be paying self employment estimated tax. How do I get caught up? How bad will the penalty be?
I have made an average of 8,000 per month since March.
Self employed since March 2025. Haven't been laying quarterly estimated taxes. What do I do?
byu/transfixiusednon intax
Posted by transfixiusednon
13 Comments
You catch up by sending in money asap. You gave no info as to prior years tax, deductions, marital status, other income so no one can tell you the tax let alone penalties at this point
Make a tax payment as soon as possible. The penalty is basically interest, and around 7% APR.
Even if you don’t want to do any bookkeeping right now, just send in some money. Take a guess at your profit, and send in 25% of that.
Did you file a 2024 federal tax return this year?
You can go onto IRS.gov and make estimated tax payments on your account now and then again Jan 15th which is the date the 4th estimated payment is due. I’d pay whatever the first 3 quarters estimates were right now though.
If you started in March, pay the estimated for 3rd quarter asap and 4th quarter on time. As long as you pay what you may owe on time you’ll be fine.
Married filing jointly. Filed a return last year. My self employment income net profit was 20,194 last year. I paid self employment taxes on a SE 1040. Paid 2,853. And I also paid income tax owed
It’s not much of a penalty, I wouldn’t sweat it.
8k a month profit and you decided not to pay your quarterly tax why?
8000×10 months will put you in 22% bracket if single, 12% if married (and she has no income).
If single, id send 35% in for March through Sept now and follow it with 35% for Oct-Dec in early January.
Any over payments will be refunded.
Do you take payment through payroll?
Federal tax on $80,000 net self employment income, filing as single, with no other income, deductions, or credits, is about $16,750. ($11,300 self employment tax and $5450 federal income tax.) That is about 21%. State tax would be additional, depending on your state.
If you don’t pay until April the penalty might be about $700. It might be less, depending on how much you made in 2024.
If you pay now, the penalty might be about $300.
You need to talk to a CPA.
Since you made about $20,000 in 2024, your 2024 tax was probably about $3150, so your underpayment penalty for your 2025 taxes would be based on that amount. The penalty for 2025 if you don’t pay until April would be about $150. If you pay now, it would be about $65.
(That’s assuming you had no other income. If your spouse works, it would be different.)