5 Unexpected Financial Benefits of Stay-at-Home Parenting
Being a stay-at-home parent is not for the faint of heart, but it can be good for your finances. Here are five factors to consider.
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There are different benefits to being self-employed, like getting to set your own hours and say no to work that doesn’t interest you (provided you can afford to do so). But from a tax-filing standpoint, being self-employed can be tricky. That’s because it’s on you to send the IRS money every quarter to account for your earnings and make up for the fact that tax is not being taken out of your paychecks.
The IRS requires people who are self-employed to make estimated tax payments every quarter. For 2023, those payments were or are due on the following dates:
- April 18
- June 15
- Sept. 15
- Jan. 16, 2024
The reason your final estimated tax payment isn’t due until January is that your final earnings for the year may not hit your checking account until very late December, so it’s not reasonable to expect you to be able to calculate and make your last payment by the end of 2023.
It’s likely easy enough to remember to submit your first estimated quarterly tax payment, since it aligns with the tax-filing deadline in April. But you may have forgotten to send in your quarterly payment in June.
That’s understandable because that payment may not have been on your radar at that point. But if you missed the June deadline, it’s important to rectify that situation as soon as you can.
Don’t just wait until September
If you failed to make your last estimated tax payment, you may be inclined to just pay the IRS a little extra in September. But that’s a mistake.
The IRS expects you to pay taxes as you earn money, and you could face penalties for not paying your taxes quarterly as you’re supposed to. In fact, you could be on the hook for penalties and interest even if you’re just one day late in making your payment past the quarterly deadline. As such, TurboTax says that if you miss a payment deadline, the best thing to do is calculate how much you owe and send the IRS that money as soon as you can.
A good way to avoid missing deadlines
The IRS will generally let you set up automatic payments for estimated tax purposes. Of course, the tough thing here is estimating exactly what you’ll owe each quarter, but an accountant may be able to help you with that.
You may decide to err on the side of overpaying the IRS to avoid having to write the agency a check when you file your tax return. But either way, you should be able to set up automatic payments so the IRS receives its money on or by any upcoming deadlines.
If you don’t want to sign up for automatic payments, mark Sept. 15 on your calendar and set a reminder so you don’t forget to make your payment. You may, in some cases, be able to appeal a penalty for a missed quarterly deadline if you were only late once. The chance of pulling that off two quarters in a row is a lot slimmer.
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