Estimated Taxes (USA)
Thread poster: Gregory Flanders
| | Gregory Flanders
Local time: 16:42
Partial member (2007)
French to English
I believe I'll be making enough money in 2008 to require estimated tax payments to Uncle Sam come the 15th -- have I understood this correctly? Do you (I'm speaking to American freelance translators, obviously) pay quarterly estimated taxes? Or just include everything as personal income at the end of the year?
And, if so, what happens in 2009 if I decide to stop working as a freelance translator, will I be expected to pay the same estimated tax as 2008, but get it back at the end of the year?
Thanks in advance,
| pay estimated taxes || Apr 2, 2008 |
Hi Gregory. I do suggest you pay quarterly estimated taxes, though you may not be technically required to do so. When you have a free hour, you should go to the irs.gov website, where you can find the estimated tax forms, instructions, and publications that explain who is required to file quarterly. In my experience, it's to your own benefit to pay the estimated taxes quarterly to avoid getting slammed with a big tax payment at the end of the year. What I've learned over the past several years of doing this, and from my accountant, is that you don't have to worry too much about exactly how much estimated taxes you pay, as long you pretty much cover your tax liability over the cost of the year. If you under pay, the worst that will happen is that you could get a fine--but that's unlikely unless you underpay by a lot. The way my accountant has advised me to do it is to simply pay 10% of my actual earnings for each quarter on the estimated tax payment (or just calculate whatever seems to be the correct percentage for you, since you don't live in the US).
In terms of your other question--as far as I understand it, like I said, the estimated taxes are exactly that--an *estimation* of your actual taxes. So, if in 2009 you're no longer working freelance, you shouldn't have to pay an estimated taxes at all.
Hope that helps.
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| | Henry Hinds
Local time: 08:42
English to Spanish
The others have given good advice on US estimated taxes, I have done it myself for years since there is no withholding, I earn no salary.
But you apparently live in France, so why would you not be paying taxes there instead of to Uncle Sam?
| | The Misha
Local time: 10:42
Russian to English
| Hery is right || Apr 2, 2008 |
I f you are not a US resident for tax purposes, you do not owe Uncle Sam anything, even if you draw income from US sources. There is of course the matter of withholding taxes, but let your US payer worry about it. If they do not try to withhold, then there is no reason for you to even bring this matter up.
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