If you pay quarterly estimated income taxes, remember that your fourth-quarter estimated tax payment (using form 1040-ES) for 2009 is due on January 15, 2010. You may delay making this payment until February 1, 2010, if you file your 2009 return (Form 1040) and pay any tax due by February 1, 2010.
Most mystery shoppers are not required to pay quarterly estimated taxes, because mystery shopping represents a small portion of their overall family income. However, if mystery shopping and other independent contractor or small business income makes up a significant part of your income, you should determine if you need to pay quarterly.
Not sure if you have to pay? You can figure it out by consulting the IRS web site at http://www.irs.gov/publications/p505/ch02.html
Need to know more?
Here are some general rules about who has to pay estimated taxes:
If most of your income is from being an employee, and you have tax withheld from your paychecks at your primary job, you may not need to pay estimated taxes. (This could also apply if your spouse is the primary wage earner and s/he has taxes withheld from his or her check.)
You must pay estimated tax for 2009 if both of the following apply.
1. You expect to owe at least $1,000 in tax for 2009, after subtracting your withholding and credits.
2. You expect your withholding and credits to be less than the smaller of:
1. 90% of the tax to be shown on your 2009 tax return, or
2. 100% of the tax shown on your 2008 tax return. Your 2008 tax return must cover all 12 months.
Keep in mind that because of a change in the withholding schedules during 2009, the amount of income tax withheld from paychecks decreased. That means that many people who expect refunds will be surprised with a tax bill when they file.
You can download the 1040-ES form for paying your estimated income taxes, along with the instructions and more information about estimated taxes at http://www.irs.gov/pub/irs-pdf/f1040es.pdf
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