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Thread: Estimated quarterly tax payments (NYC)

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    Default Estimated quarterly tax payments (NYC)

    So I'm trying to figure out what percentage of my nightly earnings I should save to put towards my estimated quarterly tax payments. I've read up as much as I can, but all the numbers are still making my brain hurt. I'm single and I live and work in NYC. From what I've gathered, I should be saving about 30-35% of my total income for my federal taxes. In addition to those, there are NY state income taxes that total out to about 7%... and then NYC taxes that I should estimate at about 3%. Then I need to save 15% for self employment taxes. If I'm doing the math right, this leaves me with only about 40% of my income to keep. Please tell me I'm getting something wrong...

    From what I understand, I'll take my percentage from all my earnings in January/February/March, write out a check and send it to the IRS with the 1040 form by April 15, and then I'll repeat that process every three months for the rest of the year. Is that kind of correct? Thanks in advance... you guys are lifesavers.

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    Default Re: Estimated quarterly tax payments (NYC)

    ^^^ the first 'mistake' is that the 30-35% in total federal taxes is comprised of a 15.3% social security ( aka self-employment ) tax plus a 15-25% federal income tax ... which make a federal total of 30-40% . State income tax can run 5-9% on top of that. And city income tax can run 1-3% on top of that. The variables depend on your actual 'taxable income' level after exemptions and deductions are applied.

    the second 'mistake' is that filing and paying estimated taxes doesn't directly involve your federal 1040 annual tax return ( or your NY IT-201 state annual tax return ) . In fact it involves form 1040ES (as well as additional NY state and city estimated tax voucher form IT2105 ). And the next estimated tax payment is actually due this coming Wednesday January 15th, based on income earned during September, October, November and December of 2013.

    In 'normal' years, the IRS does allow the bundling of the January estimated tax payment with the filing of your federal 1040 annual tax return ... but ONLY if the 1040 can be filed by January 31st ( as opposed to April 15th ). Same is true for NY State and the filing of their IT201 annual tax return. However, this year, because of after-effects of the gov't shutdown, the IRS may or may not be ready to accept 1040 annual tax returns by the end of January. Also, due dates for clubs and webcam hosts sending out 1099's isn't until February, meaning that a dancer or camgirl who files her 1040 annual tax return before the middle of march ( by which time all 1099's and other tax documents should have arrived ) may face the necessity of also filing an amended tax return if the financial info shown on the 1099's disagrees with her earlier tax return filing amounts .

    Also, to try and be perfectly clear, filing a federal 1040 plus NY IT201 annual tax return by April 15th 2014 involves income earned, and actual taxes due, on money you earned during January through December of 2013 ( against which previously filed estimated tax payments from April 2013, June 2013, September 2013 and January 2014 are 'credited' ). Filing a federal 1040ES plus NY IT2015 estimated tax vouchers by April 15th 2014 involves income earned, and estimated taxes due, on money you earned during January, February, and March of 2014 !!!. Thus if you have not filed any estimated tax vouchers, and have not made any estimated tax filings / payments before now, when April 15th arrives you'll actually be required to pay the actual taxes due on your 2013 income ( via your annual tax returns ), PLUS the estimated taxes due on your Jan, Feb and March 2014 income (via your first quarter 2014 estimated tax vouchers ), by the same April 15th 2014 deadline.
    Last edited by Melonie; 01-13-2014 at 04:27 AM.

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    Default Re: Estimated quarterly tax payments (NYC)

    just file annually. its so much easier. once you factor in deductions and everything its just better to do it once a year. you won't be paying 60% btw not even close.

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    Default Re: Estimated quarterly tax payments (NYC)

    ^^^ yes of course it's easier. But these days it can also result in 'under-withholding' penalties and interest charges being added by the IRS and the NY State Tax agency on top of the income taxes originally owed.

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    Default Re: Estimated quarterly tax payments (NYC)

    I paid my quarterly taxes that were due in January. Tomorrow I am filing my 1099's 2013 taxes. Will he give me a an estimate of what I owe for Jan, Feb, March 2014 then ? And then I will have to send the 2013 taxes owed plus the first 3 months of 2014 estimate by April 15. Did I get that correct ?

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    Default Re: Estimated quarterly tax payments (NYC)

    ^^^ yes April 15th is a double deadline. Tax returns for 2013 are due, along with payment for any taxes owed on 2013 income that weren't covered by estimated tax payments made in April, June or September 2013 or on Jan 15th 2014. But an estimated tax payment for 2014 income earned between Jan 1 and April 1 of 2014 is also due.

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    Default Re: Estimated quarterly tax payments (NYC)

    Thank you. I understand now.

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