The $350 wake-up call from a missed quarterly estimate

I was freelance editing for three years in Denver and thought I had my taxes handled. Then April 15th rolled around and I owed $3,200 because I never set aside anything for self-employment tax. My accountant just looked at me and asked 'you didn't know about estimated payments?' Has anyone else been blindsided by a tax bill this bad?

3 comments

3 Comments

zarat376d ago

Lol oh I felt that one in my soul. My first year freelancing I was so proud of myself for saving for "taxes" and then my CPA was like "cool, now where's the self employment tax portion?" and I just stared at him like a deer in headlights. $350 is honestly a bargain for that lesson, I had to do a payment plan for like $4k and still couldn't afford groceries that month because I was so dumb about it.

bell.jessica6d ago

Wait, are you telling me the self employment tax caught you off guard too? I learned that one the hard way when my CPA asked if I'd set aside for Medicare and Social Security and I thought he was joking. @zarat37 at least you got the payment plan route, I just ignored the letter from the IRS for three months like a moron and ended up with penalties on top. Now I just treat every freelance check like it's 30% smaller before I even look at it.

the_hayden6d ago

Deer in headlights" describes me perfectly at 25 when I found out that same thing, @zarat37.