Self-Employed? It's Not Just Your Tax Return That's Due April 15

It may not exactly come as a surprise that taxes are due this year on April 15. After all, that's the standard filing deadline. So hopefully at this point, you've either submitted your return to the IRS or are really close to doing so.

If you don't think you'll be able to finish your taxes by April 15, it definitely pays to request an extension. The IRS will give you six more months to file if you put in that request by April 15, and you don't even have to rack your brain to come up with a creative reason for it.

If you owe the IRS money and are late with your tax return, there can be a costly penalty involved. So that's a situation you'll want to avoid.

But if you're self-employed, there's another tax-related item you'll need to check off your list by April 15. And unlike your 2023 return, this is one thing you can't get an extension on.

You need to make your first estimated tax payment

Salaried workers have taxes withheld from their wages every pay period. But if you're self-employed, that doesn't happen. As such, it's on you to pay the IRS as you go by making estimated tax payments on your earnings every quarter. And your first estimated payment for 2024 is due on April 15, the same day as tax returns for the previous year.

Your subsequent estimated tax payments are due as follows:

• June 15, 2024
• Sept. 15, 2024
• Jan. 15, 2025

The reason your final tax payment for 2024 is due in January, not Dec. 31, is that you might receive some payments very late in the year -- as late as Dec. 31. It wouldn't necessarily be reasonable to expect you to calculate your tax obligation from the previous quarter in a single day. So the IRS gives you a couple of extra weeks to run those numbers.

Do you need to make estimated quarterly tax payments?

As a general rule, if you expect to owe $1,000 or more in taxes due to self-employment income, then you should be making estimated quarterly payments. If all of your income is freelance in nature, then you should be making estimated tax payments on your total income. If you're a salaried worker with a side hustle, you should be making estimated payments on your gig earnings only, assuming you expect to owe $1,000 or more in taxes on those earnings.

To be clear, if you expect to owe less than $1,000 in taxes on freelance income, you still have to pay it to the IRS -- but you don't necessarily have to pay it in advance. You can pay it in conjunction with filing your next return and generally avoid a penalty.

Now, figuring out your estimated tax payments can be tricky. You can use online tools but they may not be so comprehensive. A better bet is to consult an accountant or tax professional and have them run the numbers for you. They can take your total tax picture into account and help you arrive at estimates that may be far more accurate than the ones you come up with yourself.

Of course, when you're self-employed, it's also a good idea to keep extra money in your savings account in case you end up owing the IRS during tax season. This can happen even if you have a professional calculate your estimated tax payments for you.

For now, though, make sure not to forget about your first estimated tax payment for 2024. You may be focused on finishing your tax return by April 15, but you'll also want to get that payment submitted as well.