BEYOND THE NUMBERS
New Tool Helps Self-Employed Calculate Estimated Tax Payments
Some 15.6 million U.S. workers were self-employed in 2018, many of whom are part of the growing gig economy and are taking side jobs. Self-employment can have complicated tax implications, but CBPP’s Get It Back Campaign has a new tax tool — the first of its kind online — that can help the self-employed calculate their estimated tax payments. (Thanks to CBPP’s Nick Kasprak for developing the calculator.)
Anyone who expects to owe more than $1,000 in taxes must pay estimated taxes throughout the year. The number can be hard to calculate without outside help. For those who don’t make these payments, the IRS may charge fees.
Our calculator asks eight questions about a user’s household, income, tax withholdings, and expenses. With this information, it calculates the user’s 2019 tax liability based on income and self-employment tax liability, adjustments and deductions, and tax credits for which the user likely qualifies. The user then chooses how many payments they want to make. Finally, the tool presents a snapshot of their upcoming tax year.
This tool is a part of Roadmap to Rideshare Taxes, a comprehensive tax resource for Uber and Lyft drivers. The project’s aim is to provide gig economy workers with information and resources to help them understand the tax impact of their work.