My seasonal math allergy seems to be back. Just the word “taxes” triggers a semi-hypnotic state where my eyes glaze over and I’m willing to give anything, short of my children, to anyone willing to tackle the math, forms and legalese of my income taxes. But to avoid tax penalties for underpayment or late payments, as self-employed military spouses, we must know if we owe estimated quarterly taxes and when and how to pay.
- File your annual income tax return. You must file an annual income tax return if your self-employment net earnings were $400 or more. Even if you earned less than that, you still may need to file, but you can double check by reading Form 1040 instructions on the IRS website.
- File and pay estimated quarterly taxes. Self-employed workers are required to pay self-employment, or SE (Social Security and Medicare) and income tax by paying estimated quarterly taxes. Employers withhold taxes each paycheck for employees, but since you’re self-employed, you have to personally withhold taxes and pay the government quarterly.
- How do I know if I have to pay estimated quarterly taxes? To figure out if you must pay quarterly taxes, gather last year’s tax return and use it to help you fill out the worksheet from Form 1040-ES. If you are newly self-employed this year, you’ll need to estimate your income for the full year. If you find you’ve estimated too high or too low by the next quarter, make sure to refile the 1040-ES to recalculate next quarter’s estimate.
- When do I have to pay quarterly taxes? If you can pay your yearly taxes in a lump sum, do so on tax day, April 18, 2017. If you can’t pay them in a lump sum, then pay quarterly in equal amounts on April 18, 2017; June 15, 2017; Sept. 15, 2017; and Jan. 16, 2018. The dates change each year, but the traditional tax day is April 15.
- How do I pay quarterly taxes? You can use one of the blank vouchers found in Form 1040-ES to mail quarterly taxes. File your payment electronically.
Free, easy-to-use MilTax software and support services can assist you with filing taxes without the need to pay for outside tax assistance. Benefits include free software, specialized phone support and even in-person tax help available at some Volunteer Income Tax Assistance Program locations. As part of the military community, you and your family are eligible for these exclusive resources. Take that, seasonal math allergy.