Quarterly Estimated Taxes
Estimated taxes are necessary to be paid to avoid penalty interest for certain individuals & businesses. These include entities that earn income where taxes are not being withheld. Examples can be found in the list below.
If you have received income from the following items, it’s likely that you should be paying quarterly estimated taxes to the IRS. You will likely also owe tax to applicable state/local jurisdictions where you live and/or work:
Business income, such as s-corp income, c-corp dividends, partnership guaranteed payments, etc. K-1 income from private equity investments, law firms, oil & gas, real estate, business, etc. Any type of K-1 may trigger the need to file quarterly estimated taxes Equity compensation, such as RSU, ESPP, ISO, NSO, or other types of equity payout 1099-MISC income – this is for consulting, self-employment, contracting, gig income, or any other type of non-wage income 1099-K income – this comes from certain types of online accounts where you may have made money, such as eBay or Square 1099-B, 1099-DIV, and 1099-INT – significant investments or gains Single-member LLCs: You may need to pay estimated taxes if you are showing net income after expenses in any given quarter Significant W2 income where historically not enough taxes were being withheld by the employer/HR/Payroll Other – court settlements, gambling winnings, prize winnings, alternative investments, bitcoin gains, sale of business interest, sale of land, etc.
