Got roasted by my CPA about my quarterly tax payments

I've been paying estimated taxes based on last year's income but my freelance gig doubled this year. My CPA said I'm going to owe a $1,200 penalty because I didn't adjust for the higher income. How do you figure out your quarterly payments when your income jumps around like mine?

2 comments

2 Comments

the_spencer1mo ago

Safe harbor rule is your friend. Pay 100% of last year's tax (110% if you make over 150k) and you won't get penalized even if you owe more. Just make sure you're sending enough to hit that number each quarter. Once you know your income is way up, you can bump it up for the next quarter to chip away at the bill. Saving 30% of every freelance check in a separate account saves headaches too.

kair651mo ago

Save 30% of every freelance check" is the real pro tip right there, @the_spencer. I do the same and it takes the sting out of April. Even if you miss the safe harbor number, having that buffer saved already solves most of your headache.