Freelancers Who Pay Estimated Taxes to the IRS, Here's a Tip For You

NOTE: Let me state up front that I am a sole proprietor. So I'm working from that experience. Regardless, for all business types, consult your accountant or financial advisor or attorney.

If you are a freelancer who pays quarterly estimated tax payments to the IRS, we all pretty well remember the dates associated with those four IRS quarters (not to be confused with what accountants may deem as the standard quarters of any calendar year, BTW).

These IRS quarters are usually on (or after in some years) the fifteenth day of April, June, September, and January of the following calendar year. See IRS Form 1040-ES for each tax year to confirm.

Per the IRS.gov website (found at https://www.irs.gov/faqs/estimated-tax/individuals/individuals-2), a chart is provided of actual deadlines for 2020 estimated taxes. Although "2020" is not specifically stated, in the footnote at the bottom, it notes "Page Last Reviewed or Updated: 25-Nov-2019." And I've checked my 2020 calendar to confirm all these dates fall on weekdays (no weekends).

When to Pay Estimated Tax

 

Payment Period	Due Date
January 1 – March 31	April 15
April 1 – May 31	June 15
June 1 – August 31	September 15
September 1 – December 31	January 15* of the following year. *See January payment in Chapter 2 of Publication 505, Tax Withholding and Estimated Tax

But did you know that you can make multiple payments toward each of the four quarterly deadlines?

Per the IRS.gov website again (found at https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes), here's an excerpt relevant to this discussion, but you should particularly read the part I've bolded therein:

When To Pay Estimated Taxes

For estimated tax purposes, the year is divided into four payment periods. You may send estimated tax payments with Form 1040-ES by mail, or you can pay online, by phone or from your mobile device using the IRS2Go app. Visit IRS.gov/payments to view all the options. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.

Using the Electronic Federal Tax Payment System (EFTPS) is the easiest way for individuals as well as businesses to pay federal taxes. Make ALL of your federal tax payments including federal tax deposits (FTDs), installment agreement and estimated tax payments using EFTPS. If it’s easier to pay your estimated taxes weekly, bi-weekly, monthly, etc. you can, as long as you’ve paid enough in by the end of the quarter. Using EFTPS, you can access a history of your payments, so you know how much and when you made your estimated tax payments. [Emphasis added.]

Granted, I would like to hold on to my money as long as possible to cover any surprise expenses that may come. However, I have to balance that mind-set with the reality of paying a huge (IMO) chunk of money to the IRS quarterly to avoid paying an even bigger wad come income tax time.

Obviously I'll make those four IRS deadlines for quarterly payments/income tax payments. But for the other eight months of the year? Yeah. I think I will make a monthly payment. Both my bank and my online payment system give me monthly earnings calculations, so it's easy to then apply my 15.3% in self-employment taxes (adding in a guesstimate to cover actual income taxes), to arrive at a relevant monthly figure that I owe the IRS. I'll tweak each month accordingly, especially around those four tax-time months.

Now if you are making the big bucks, this may not work for you. Especially when you can earn some major interest on your own money in the meantime. I get that. Then wait to the last minute to fork over that IRS payment. But me? I'm making pennies on my dollars that sit in plain old checking and savings accounts. So better for me to send that money earlier to the IRS rather than maybe spend it on splurges at the grocery store. In my financial world, if it's in my checking account, my net balance (taking into account the pending bills to be paid), seems like free money to me. Knowing this about me, I can't let that tax money end up in my checking account. :)

Just remember. Freelancers, whether poor or rich, need a financial plan. If yours is to avoid credit card debt or to set up an emergency fund with six months' worth of living expenses therein, you must figure that out for yourself, based on your particular circumstances.

Help stop the worry by starting an emergency fund, paying in estimated taxes more often, even meditating and deep breathing and voicing your gratitude and exercising and sunbathing and forest bathing and reading and journaling and writing and whatever else adds more joy to your life.

Overall, be kind to yourself and others. Amen.

Welcome to My World, Where Every Day Is a Saturday

Denise Barker, Author, Blogger, Copy Editor
Books that Build Character(s)

amazon.com/author/denisebarker

https://deniseannbarker.com

WE, THE PEOPLE, Are the Living Breathing Constitution: Get Out to Vote

NOTE: This blog is not the proper place for political discussions, and that is not my intent with this post. All such political-leaning comments, in my sole discretion, will be deleted.

That said, the main point of this post is simply this:

Get out and vote, people, in the primaries as well as your local and state elections leading up to the Tuesday, November 3, 2020, presidential election.

Everybody's vote counts. Don't listen to those who say, "But my vote cancels out yours, so let's not bother."

It matters because we matter. Our individual voices matter. Remember to: 

Proudly exercise your right to vote.

I know I will. Join me?

God bless America.

Copyediting Tip: The Problem with Pronouns

The problem with pronouns is when you have two or more males (or two or more females) in a conversation and drop in "he." If Tom, Bill, and Brian are all talking, and you have several lines of tagless dialogue, can you, the reader, be certain if "he" is Tom or Bill or Brian?

Avoid any reader confusion in instances like this by changing any dubious "he" references to the person's name instead.

It's all about clarity, folks.

Keep on writing.

Welcome to My World, Where Every Day Is a Saturday

Denise Barker, Author, Blogger, Copy Editor
Books that Build Character(s)

amazon.com/author/denisebarker

https://deniseannbarker.com

Copyediting Tip: 17CMS 5.91 on Coordinate and Cumulative Adjectives

I'm a copy editor, working with prolific Indie authors who have a great grasp of the written word. Love my job; it's fun, not work. While I may be the grammar and spelling police, I do more than just that because it all comes down to communication that works, that gets the correct idea across. My head is so cluttered with rules and their manifold exceptions, but my main goal when copyediting is to not confuse the reader.

Today's tip is about 17CMS 5.91, Coordinate Adjectives.

Coordinate adjectives take a comma. Example: "the red, white, and blue flag." The test is if "and" could replace the commas. Example: "the red and white and blue flag."

However, cumulative adjectives do not take a comma. While 17CMS 5.91 does not include this extra information, I've found this added explanation to be helpful:

Cumulative adjectives differ from the "same kind" (coordinate) adjectives where serial commas are used. These cumulative adjectives follow a certain order: Number + Opinion + Size + Age + Shape + Color +Origin/Nationality + Material + Purpose (which all identify/modify one particular noun inserted herein at the end). Note that some sources switch the Size + Age to be Age + Size. Just FYI. An example using all noted categories is: “Three perfect petite newborn cupped yellow French organic homeopathic roses lay on the table.” Of course, you would rarely use all the various types of cumulative adjectives in the same sentence; it’s cumbersome.  Also note that the coordinate adjectives are just one kind of cumulative adjective used over and over. My flag example above uses three color adjectives, turning cumulative adjectives of the same category into coordinate adjectives.

This is fascinating to me. Granted, the editing part comes after the creating part. I find myself, when in author mode, intent on getting my thoughts down before they expire. Then, when review time comes, my copyediting self comes into play.

Whether you implement these 17CMS rules or not in your first draft, hopefully you have a great copy editor to catch these for you.

Welcome to My World, Where Every Day Is a Saturday

Denise Barker, Author, Blogger, Copy Editor
Books that Build Character(s)

amazon.com/author/denisebarker

https://deniseannbarker.com