If you pay estimated taxes, remember that the 1Q 2009 bill was due 15 April 2009. With everyone focusing on finishing 2008 taxes, it’s easy to overlook this deadline for the current year’s obligations.

If your primary income is from an employer that withholds sufficient tax, so that when you file your income tax you either get a small refund or a small bill — generally less than $1,000 — then you don’t need to file estimated taxes.

If you have significant other income, for example, from investments, then you need to calculate the additional tax you will owe, and send it in.

If you own or participate in a small business, then you need to calculate the business’ quarterly profit. The profit is distributed to you (if you are the sole proprietor), or to the partners (if it is a partnership). You must pay self-employment tax of 15.3% plus income tax on your income from the business. If your business is a corporation, then consult the relevant regulations.

If you are self-employed as an independent contractor, you might not think about income tax until you start receiving 1099-misc’s at the beginning of each year. Turns out that you really do have a small business — the business of you — whether you think about it that way or not. And, yes, you should pay estimated taxes, including the self-employment tax.

“Taxes are the price we pay for a civilized society” Oliver Wendell Holmes, Jr.

1040-ES: Estimated Tax for Individuals

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