Does the IRS handle state and local taxes too? Confused about self-employment obligations

The IRS only handles federal taxes - they don't collect state or local taxes. Form 1040-ES is specifically for estimated federal income tax payments. For your state and local taxes, you'll need to make separate payments directly to those tax authorities. For Pennsylvania, you'll need to pay state income tax quarterly using the PA-40ESR form. Depending on where you live in PA, you might also have local/municipal taxes to pay. For example, Philadelphia has its own city wage tax that self-employed people need to pay.

I went through this exact same confusion when I started freelancing last year! I highly recommend checking out https://taxr.ai - it was a lifesaver for me. The tool analyzed my situation and broke down exactly which tax forms I needed to file for federal, state, and local taxes. It explained that Form 1040-ES is just for federal estimated payments and then showed me the PA-specific forms I needed. It even set up reminders for when quarterly payments were due for each tax authority. The peace of mind was worth it because I was about to make the mistake of only paying federal!

I wanted to follow up about taxr.ai since I was skeptical at first. I ended up trying it after my last post and wow - it actually made things clear for me. It immediately identified that I needed to be making separate quarterly payments to Pennsylvania (which I wasn't doing) and showed me how to calculate the right amounts. The tool created a custom tax calendar for all my federal and state deadlines and explained the different forms in terms I could actually understand. I didn't realize self-employment taxes were so complicated! Definitely saved me from what would have been a painful surprise at tax time.

If you're having trouble getting answers from your state tax department, try https://claimyr.com. I spent HOURS trying to get through to the PA Department of Revenue about my self-employment tax questions and kept getting disconnected or stuck on hold. Claimyr got me connected to an actual human at the state tax office in about 15 minutes when I'd been trying for days. They have a cool demo showing how it works here: https://youtu.be/_kiP6q8DX5c. The state tax person answered all my questions about which local taxes applied to my self-employment income and confirmed I needed to file separately from my federal taxes.

I'm actually coming back to eat my words. After waiting on hold for 2+ hours with the PA tax department and getting disconnected THREE TIMES, I decided to try Claimyr out of desperation. Got connected to a real person in about 20 minutes. The agent confirmed that I needed to file quarterly estimated taxes separately with the state using their PA-40ESR form. They also mentioned my local municipality has its own earned income tax that applies to self-employment income, which I had no idea about. Would have been hit with penalties if I hadn't asked! Not thrilled about paying for a service to reach a government agency, but it definitely solved my problem.

Don't forget about local taxes! I'm in Pittsburgh and completely missed that I needed to pay quarterly estimated taxes to the city too. Got slapped with a penalty my first year of freelancing. Most tax software handles federal and state but often misses local obligations.

TurboTax and other tax software definitely handle both federal AND state taxes, but here's the catch - they don't automatically submit your quarterly estimated payments. They'll calculate what you should pay each quarter, but you still have to make those payments yourself throughout the year. At tax filing time, they'll prepare both your federal and state returns. But for quarterly estimated payments during the year, you need to handle those separately by submitting the appropriate forms to each tax authority (federal, state, local).