You may not be aware, but every individual that earns 1099 self-employment income is required to pay their "estimated" income tax four times per year, due the following dates:
- Q1 is due April 15th
- Q2 is due June 15th
- Q3 is due September 15th
- Q4 is due Jan 15th of the next year
There's no need to worry; Track automatically files and pays your quarterly estimated payments to the IRS.
How do I get started?
To have us automatically handle your quarterly payments, you'll need to enroll in quarterly payments. This can be done from the "Summary" screen by clicking "Set up Quarterly Tax Payments". You'll be asked to provide some personal tax info, and sign a form 8821 which authorizes Track to submit quarterly payments on your behalf.
Which taxes does Track pay quarterly estimates?
Track files and submits quarterly estimated payments to the IRS for 1099 income, which includes:
- Federal Income Tax
- Self-Employment Tax (Social Security and Medicare)
How exactly does the automatic quarterly filing work?
At the end of a tax quarter, Track automatically sends the money you’ve withhold for taxes to the IRS for Federal Income and Self-employment taxes.
Prior to the end of the quarter, Track will send you an email summarizing the quarterly estimate payments that will be submitted on your behalf. This will give you an opportunity to withhold for any outstanding tax liability, helping you avoid penalties. You also have the option to cancel or update a tax payment by contacting us directly.
What amount is used for payment of the quarterly estimate?
The amount of the payment will be the lesser of your outstanding federal tax liability, or current tax withholding balance.
What proof do I get that the quarterly payment was processed?
You will receive a receipt via email. You can also download a form 1040ES (quarterly payment voucher).
What happens to unused funds in my Tax Withholdings?
All remaining funds for a tax year will be returned to you on April 1st of the following tax year (i.e. for the 2019 tax year, remaining funds will be returned on April 1st, 2020. This includes the amounts that are withheld for your state income tax.
Does Track also submit state quarterly payments?
Unfortunately, we do not submit quarterly payments to individual states. Any withholdings that are attributed to your state tax liability will be returned automatically to your bank account prior to the year's annual filing date.
What about end of year tax filing?
Track does not provide end of year tax filing - however we have partnered with Credit Karma to provide free annual filing! If your tax situation is more complicated, we can also refer you to a CPA in your area.
I missed a previous quarterly payment... can Track handle that for me?
Track does not submit quarterly payments for previous quarters, nor do we submit quarterly payments after the stated deadline. We do, however, let you “catch up” and pay in subsequent quarter, helping you avoid penalties.