First year in retirement, 56 years of age. I retired from formal employment mid-year, and then ramped up a side gig that I have been doing for a while. I have always paid taxes on the side-gig income, and will continue to do so going forward. However, in the past, it was insignificant, tax-wise, and I took care of it with the withholdings from my formal employment.
The problem is that until now I never had to worry about paying estimated taxes (the amounts were small enough to not matter), but this year I should have started that in the 3rd quarter, or possibly before. Here we are in the 4th quarter, and I wish to do what I can to minimize any problems.
The side-gig income is not that much, maybe will hit $13,000. I did a preliminary calculation, and it looks as though I will owe $1500-2000 or so to the IRS. I have already taken advantage of IRA contributions and whatever I know of to make that might lower that.
I am not concerned about paying the amount owed, but rather how do I go forward between now and the end of the year to ensure that I don't get hit with any tax penalties? Do I simply send in the estimated amount (whole year) in the 4th quarter? Anything else? Or is my concern overblown?
Thanks for any thoughts.
The problem is that until now I never had to worry about paying estimated taxes (the amounts were small enough to not matter), but this year I should have started that in the 3rd quarter, or possibly before. Here we are in the 4th quarter, and I wish to do what I can to minimize any problems.
The side-gig income is not that much, maybe will hit $13,000. I did a preliminary calculation, and it looks as though I will owe $1500-2000 or so to the IRS. I have already taken advantage of IRA contributions and whatever I know of to make that might lower that.
I am not concerned about paying the amount owed, but rather how do I go forward between now and the end of the year to ensure that I don't get hit with any tax penalties? Do I simply send in the estimated amount (whole year) in the 4th quarter? Anything else? Or is my concern overblown?
Thanks for any thoughts.