If you are a salaried employee, you usually don't need to worry about taxes until April 15, when you file your yearly return. However, the situation is different for freelancers, consultants, and independent contractors, who have to forward their own taxes to the IRS on a quarterly basis. Failure to pay your estimated taxes promptly, and in the correct amount, can lead to serious penalties, at which point you may need to hire an experienced Oklahoma tax lawyer from the firm of Travis W. Watkins, PC.
Your Estimated Taxes Should Closely Approximate Your Yearly Tax Bill
There are two tricks to filing estimated taxes in Oklahoma. The first trick is meeting the necessary deadlines to send in your estimated taxes, which, somewhat oddly, aren't spaced exactly three months apart:
- January 15 (or, a few days later, if this falls on a Friday)
- April 15, concurrent with your yearly tax return
- June 15
- September 15
(Bear in mind that your estimated tax payment due on April 15 is entirely different from your yearly tax bill, and should be sent to the IRS separately. The first is calculated from your expected income for the period from April 15 to June 15, while the latter pertains to the previous year, which ended on December 31.)
The second trick to filing your estimated taxes is guessing the amounts correctly. If you have been a freelancer, independent contractor, or consultant for a number of years, you probably know enough about the ebb and flow of your line of work to estimate your income for the coming three months, and send in your taxes accordingly. The good news is that you have a certain amount of flexibility: if it turns out that you underpaid your taxes in one quarter, you can make up the difference the next. The IRS won't mind unless your yearly total comes in significantly below what they say you should pay in tax.
What happens if you don't pay estimated taxes?
If you don't earn a lot of money in the first place, failing to pay your estimated taxes may mean facing a small penalty (but, you wouldn't be on the hook for that much estimated tax in the first place). On the other hand, if you have a good salary and neglect to file your estimated taxes, then the IRS will seek the maximum penalty, which can amount to thousands of dollars.
Unclear About Estimated Taxes? Contact an Experienced Tax Lawyer
If you've spent years as a salaried employee and only recently made the leap into self-employment, estimated taxes can be a tough bear to wrestle. If you have any questions about your estimated tax strategy, or if you fear you've ventured into the penalty zone, call Travis W. Watkins today at 800-721-7054 for a free consultation!