If you pay quarterly estimated income taxes, remember that your fourth-quarter estimated tax payment (using form 1040-ES) for 2008 is due on January15, 2009. You may delay making this payment until Jan. 31 if you file your 2008 return (Form 1040) and pay any tax due by February 2, 2009.
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 2008 if both of the following apply.
1. You expect to owe at least $1,000 in tax for 2008, 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 2008 tax return, or
2. 100% of the tax shown on your 2007 tax return. Your 2007 tax return must cover all 12 months.
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
What percentage of shoppers actually make enough to need to file this way? I’d assume a fair amount since you’re blogging about it. even doing shopping, merchandising, thearter, and auditing I still don’t make anywhere near enough to do it this way. Heck my total income isn’t much more than what I’d need to owe in taxes to file this way.
Cathy Stucker says
In general, you need to file estimated taxes if you will owe more than $1000 in taxes when you file your return. People who do a little mystery shopping here and there are unlikely to owe this much and would not have to file quarterly.
If the shopper (or the shopper’s spouse) has a job where taxes are withheld, a simple way to avoid paying quarterly estimated taxes is to have a little extra withheld by the employer.
However, someone for whom mystery shopping is a significant source of income, or who does other work as an independent contractor (in addition to mystery shopping) may be required to file quarterly. Of course, it also depends on the total amount of income and what deductions and credits apply. Each situation is unique.