The 2021 tax deadline was extended to May 17 this year, but people who are 1099 private contractors and pay their taxes quarterly still need to make sure they are up to date with their payments.
If you're a private contractor and don't want to pay a penalty for underpaying your estimated taxes you'll need to pay the IRS at least 90% of the tax for the current year (2021) or be certain you've paid 100% of the tax for the prior year (2020).
For the vast majority of people who are private contractors the former will be much easier to calculate than the latter, but both options will require a private contractor to do a bunch of paperwork to ensure they are in the good graces of the IRS.
So if you're a private contractor just be aware that you technically have until May 17 to file your 2020 taxes, but just make sure you've up to date with all of your quarterly payments because that hasn't changed at all.
BlankCheck Wrote: That's exactly why I make sure I pay mine every month and not quarterly. It's simpler that way. And I pay a few percentage points over what I should, just in case. I was in trouble with not paying enough once before, and I never want to get into with the IRS again.
You and me both! I received horrendous tax advice from a major tax preparation company (I won't put them on blast here) and they woefully underestimated what my quarterly payments should be one year. It was the first year I began working as a 1099 contractor and I received the shock of a lifetime when I went to file my taxes the next year.
To the surprise of nobody, the IRS was hardly sympathetic and simply offered me two options - pay it off in full or submit monthly payments (with interest) until it's paid off. It took me 3+ years of monthly payments to pay it off.
Needless to say, I no longer use that major tax preparation company.