Do I need to pay quarterly taxes on mixed freelance income?

I work as a full-time sound designer with regular W-2 income, but started picking up side gigs last year. Been doing some podcast production work since late 2023 that brings in about $2000 annually. No big deal, I've been reporting it on my yearly taxes and moving on with my life. But now I've started doing some AI training work for a tech startup since August and made around $3800 through December. I'm seeing people talk about quarterly estimated tax payments which I've literally never heard about before. So what's the deal with quarterly taxes? Do I need to be paying these for my side income? I read something about only needing to pay quarterly if you expect to owe more than $1000 in taxes. Does that threshold apply to each individual freelance job or all my combined side income? Separately each gig would be under $1000 in taxes, but together I'd probably owe around $1700. Really don't want to hire an accountant just to answer this question, but also don't want to mess up and get hit with penalties. Any advice?

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20 comments

Jamal Carter

•8M

You need to pay quarterly estimated taxes if you expect to owe $1,000 or more in taxes for the year from all sources combined, not individually. So yes, if you're expecting to owe around $1,700 total, you should be making quarterly payments. The IRS wants their money throughout the year, not just at tax time. When you work a W-2 job, your employer withholds taxes from each paycheck. But for self-employment income, that responsibility falls on you, and the quarterly payments are the equivalent of those regular withholdings.

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Jamal Carter

•8M

If you don't pay quarterly when required, you might face underpayment penalties. The penalty is essentially interest on the amount you should have paid throughout the year. However, there are some "safe harbor" rules that can help you avoid penalties - like if you pay at least 90% of the current year's tax liability through withholding or estimated payments, or 100% of the prior year's tax liability (110% if your income is above a certain threshold). For your situation, since you've already filed, what's done is done for last year. If the IRS believes you should have made estimated payments, they may assess a penalty. But going forward, you should consider making quarterly payments if you'll owe $1,000+ again.

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Jamal Carter

•8M

Yes, your W-2 withholding absolutely factors in! This is actually one of the easiest ways to handle freelance tax obligations. If your W-2 job withholds enough to cover both your regular employment taxes AND your freelance tax obligations, you don't need to make separate quarterly payments. You can increase your withholding at your day job by submitting a new W-4 form to your employer with a lower number of dependents or by specifying an additional amount to withhold from each paycheck. Many people find this simpler than dealing with quarterly estimated payments.

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Liam O'Donnell

•8M

It analyzes your specific situation by looking at your various income sources and tax documents. You upload your stuff and it gives personalized projections of what you'll owe, not just generic advice. It breaks down exactly how much tax you need to cover through either withholding or quarterly payments. Yes, it absolutely works with 1099 contractor work! That's exactly what I used it for. It handles multiple income streams - W-2, 1099-NEC, 1099-K, etc. It actually helped me realize I could just adjust my W-2 withholding at my main job instead of doing separate quarterly payments, which was way easier for me.

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Giovanni Moretti

•8M

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Giovanni Moretti

•8M

They use an automated system that navigates the IRS phone menus and waits on hold for you. When an actual IRS agent picks up, you get a call connecting you directly to that person. It's like having someone wait in line for you - you're not "skipping" anyone, they're just doing the waiting part for you. Not affiliated with them at all. I was super skeptical too but was desperate after trying to call the IRS for 2 weeks straight with no luck. You only pay if they actually get you connected to a live person. Was worth it to me since I needed specific answers about my situation that I couldn't find online.

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Dylan Cooper

•8M

OK I need to apologize and correct myself. After being completely fed up with trying to call the IRS myself for THREE DAYS STRAIGHT, I broke down and tried that Claimyr service. Not gonna lie, I was shocked when they actually called me back with an IRS agent on the line within 20 minutes. The agent clarified everything about my quarterly payment requirements and even helped me understand some deductions I was missing. Definitely worth it and I was totally wrong to call it a scam.

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Sofia Perez

•8M

Your employer doesn't need to know why you're adjusting your withholding. When you fill out a new W-4, you can either claim fewer allowances or simply specify an additional dollar amount to withhold from each paycheck. There's no requirement to explain why you want more taxes withheld. Many people adjust their withholding for various reasons - maybe they have investment income, rental property, or just want a bigger refund. The payroll department processes the change without needing an explanation.

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