Our previous episode, “A Freelancer’s Guide to Quarterly Tax Payments,” covered the basics of estimated tax payments and avoiding underpayment penalties.

In this episode, Alex discusses safe harbor provisions and determining your estimated tax payment. Be sure to check out Publication 505 by the IRS to learn more about estimated tax withholdings and safe harbor provisions.

In this episode, you’ll also hear:

• Benefits of safe harbor provisions for non-W2 income earners

• 90% accuracy for estimated payments and paying 110% of prior year taxes

• Pro-tips for making estimated payments as a freelancer or small business owner

Must-listen moments:

[00:01:12] There are what are called safe harbor provisions within the tax code that, as long as they are satisfied, you won't owe a tax penalty for underpayment of your taxes.

[00:04:21] Look at last year's tax return and how much tax in total you owed. Then multiply it by 27.5% and pay that amount as an estimated quarterly tax payment to the IRS every quarter.

[00:06:08] If you're a freelancer, solopreneur, or small business owner experiencing massive growth in your business, I suggest hiring a bookkeeper or tax preparer to take care of these estimated tax payments for you.

In hopes you explore the safe harbor provisions fully, find relief in these safe harbor explanations, and focus on increasing your revenue in alignment with your goals.

For more detail on financial topics curated just for freelancers, visit www.freelancefinancefix.com

You’re also invited to connect with me on LinkedIn at https://www.linkedin.com/in/alexmlynch/