Quarterly Estimated Taxes
Paying quarterly estimated taxes is essential to avoid penalty interest for individuals and businesses whose income isn’t subject to withholding. Here are common scenarios where you might need to make these payments.
- Business Income: This includes income from S-Corporations, C-Corporations, dividends, and partnership guaranteed payments.
- K-1 Income: Earnings from private equity investments, law firms, oil & gas, real estate, or other businesses reported on a K-1 may require estimated tax payments.
- Equity Compensation: This includes RSUs, ESPPs, ISOs, NSOs, and other forms of equity payouts.
- 1099-MISC Income: This covers consulting, self-employment, contracting, gig work, or any other non-wage income.
- 1099-K Income: Earnings from online platforms like eBay or Square.
- 1099-B, 1099-DIV, and 1099-INT: Significant investment income or gains.
- Single-Member LLCs: If your LLC shows net income after expenses, you may need to pay estimated taxes.
- Significant W-2 Income: Where past withholding has been insufficient.
- Other Sources: Court settlements, gambling winnings, prize winnings, alternative investments, cryptocurrency gains, sales of business interests or land, etc.