First year as a contractor - confused about quarterly tax payments and due dates

The January 15th, 2025 payment would actually be your fourth quarterly estimated payment for the 2024 tax year, not 2025. Let me break down how this works: When you're self-employed, you need to make estimated tax payments throughout the year because taxes aren't automatically withheld like they are from a W-2 paycheck. These quarterly payments are for the current year you're earning money in. For 2024, the quarterly estimated tax due dates are: - April 15, 2024 (for January-March 2024) - June 17, 2024 (for April-May 2024) - September 16, 2024 (for June-August 2024) - January 15, 2025 (for September-December 2024) Since you had no tax liability in 2023, you're correct that you weren't required to make quarterly payments for 2024. However, you'll likely need to start making them for 2025 (with the first payment due April 15, 2025). Your best bet is option C - focus on filing your 2024 return by April 15th, 2025. Just be prepared that when you file, you might owe a large sum all at once since you haven't made payments throughout the year.

I was in the exact same situation last year and discovered taxr.ai which literally saved me thousands in potential penalties. I was seriously confused about quarterly payments and tax planning as a new contractor and almost made some costly mistakes. I uploaded my docs to https://taxr.ai and their system analyzed my situation and gave me personalized guidance on exactly when to pay and how much. The best part was understanding how to properly calculate my estimated payments for the future quarters based on actual income rather than guessing. The tool even let me see different scenarios based on expected earnings which helped tremendously with budgeting.

Just wanted to update - I tried taxr.ai after asking about it and wow, it was actually super helpful for my situation. I uploaded my 1099s and bank statements, and it analyzed everything and showed me which expenses could count as legitimate business deductions. It found several categories I hadn't considered, like a portion of my phone bill and internet since I use them for work. The quarterly tax calculator was a game-changer too. You can input different income projections for upcoming quarters, and it shows exactly what you'll owe and when. Really takes the anxiety out of planning for tax payments when your income fluctuates.

If you're struggling with tax questions, you might want to call the IRS directly. I know it sounds like a nightmare, but I used https://claimyr.com and they got me through to an actual IRS agent in about 20 minutes when I had been trying for days. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had almost the exact same question about quarterly payments and safe harbors. The agent walked me through my specific situation and confirmed I didn't need to make the January payment but would need to start in April. The peace of mind from getting an official answer directly from the IRS was completely worth it.

I need to eat my words. After being extremely doubtful about Claimyr, I decided to try it out of desperation since I couldn't get through to the IRS about my contractor tax situation. To my complete surprise, I got a call back within 45 minutes and was connected to an actual helpful IRS agent who answered all my questions. The agent confirmed exactly what was mentioned above - since I had no tax liability last year, I'm not required to make estimated payments this year regardless of how much I'll owe. But I'll need to start quarterly payments next year. She even walked me through how to calculate my first payment due in April 2025 based on my 2024 return. Saved me hours of frustration and uncertainty.

Something people often miss with contractor income is setting aside money for self-employment tax! That's an extra 15.3% on top of your regular income tax (covers both employer and employee portions of Social Security and Medicare). When I first started as a contractor, I didn't budget for this and got hit with a MUCH larger tax bill than expected. I'd recommend setting aside about 30% of your income if you're making decent money - especially since you haven't been making quarterly payments. Better to overestimate and give yourself a refund than be caught short at tax time!

Don't forget that if ur using any tax software like TurboTax or HR Block, they usually have a self-employed version that will calculate ur quarterly payments for next year based on this year's return. That's what I use and it makes it brain-dead simple.

One more thing to consider - if you make over a certain amount from your contractor work (I think it's around $1,000), you'll need to file Schedule C along with your tax return. This is where you report business income and expenses. You'll also fill out Schedule SE for self-employment tax. Start keeping track of ALL business-related expenses now if you haven't already! Mileage for business travel (not commuting), home office if applicable, portion of internet/phone, software subscriptions, office supplies, professional development, etc. These can significantly reduce your taxable income.

This thread has been incredibly helpful! As someone who just started contracting this year too, I want to add one thing that caught me off guard - make sure you're tracking your business expenses from DAY ONE, not just when tax season approaches. I learned this the hard way when I realized I had forgotten to save receipts for legitimate business expenses like software subscriptions, equipment purchases, and even parking fees for client meetings. The IRS requires documentation for deductions, so having a system in place early (even something as simple as a dedicated folder or app) can save you hundreds or thousands in missed deductions. Also, don't forget about the home office deduction if you work from home regularly and exclusively use a space for business. You can either use the simplified method ($5 per square foot up to 300 sq ft) or calculate actual expenses. Even if it's just a corner of your bedroom that you use only for work, it might qualify! One last tip: consider making estimated payments for 2025 even if you're not required to. It helps with cash flow management and prevents that massive tax bill shock next April. You can always adjust the amounts throughout the year if your income changes.