Tax questions
 

Hi all

I have a quick question that I wanted to run by you regarding taxes.

I've been a self employed contractor this year (though that will stop as of January)

Am I correct in thinking that because I've only been getting payments since the end of September and this is my first year in the US and thus my first time filing an IRS tax return - that I do not have to make estimated payments this year?

Thanks

Re: Tax questions
 

I'm guessing a little here, from my small knowledge of estimated taxes, but I'd have thought your estimated taxes for September were due on the Q3 date (in October, I think), and everything else due on the Q4 date in January.

But it may also depend on when you started your US tax residency (I'm not sure of your situation - some people can choose to be counted as US tax resident all year). Or your visa situation might affect when your tax residency started.

Re: Tax questions
 

I think the rule that I read was - it's called the Safe Harbor rule - that since my tax liability in the US was 0 last year, because I wasn't a US resident - no estimated payments are required this year. I actually just verified it with my tax accountant, he replied to my email as I'm typing this, and he verified that there was no necessity to make estimated payments for the above reason.

Re: Tax questions
 

Even if you don't pay any estimated tax payments, nothing bad will happen. There may be a small penalty to pay, but since it's only basically 1 quarter year, it's probably not more than a few dollars.

My alien husband was self employed for 10 years and never made the estimated quarterly payments. He chose to pay the small penalty at end of year.

Rene

Re: Tax questions
 

Ah OK - so even if it is recommended, you're not breaking the law if you don't do it? They just financially penalize you?

Re: Tax questions
 

As far as I know and have experienced, correct.

Rene