Estimated Taxes for Truck Drivers

Estimated Taxes for Truck Drivers

How do truck drivers pay estimated taxes?

As an employee, your employer withholds the proper amount of tax from your paycheck and automatically makes payment to the IRS on your behalf. If you live where state taxes apply, your employer likely remits payment to them, too.

The Who

You are required to pay Estimated Taxes on income derived from the following sources:

* All Business Earnings

* Dividend Income (from investment activity or S-Corp distributions)

* Capital Gains (occur when you sell stock or other assets)

* Alimony

You are required to pay estimated taxes if both are true:

* You are expecting to owe at least $1,000 in tax at the end of the year, AND

* Current tax payments (made by you or your employer) is less than the SMALLER of:

  •  90% of this year’s total tax bill

or

  • The full amount of last year’s tax bill

Example 1: Joseph’s tax bill for last year was $10,000. Joseph’s expected tax bill for this year is $20,000. Although he will end up owing more in taxes on April 15th, he can make $10,000 in Estimated Tax payments to avoid penalty because he paid 100% of last year’s tax bill.

Example 2: Julie’s tax bill for last year was $10,000. Her job already withheld $8,000 from her paycheck and paid it to the IRS. From investment income, her total tax bill to be $8,500. She does not have to pay additional Estimated Taxes throughout the year because 90% of this year’s tax bill has already been paid.

Special Circumstances

There are certain conditions and requirements for farmers, fishermen, household employers, and high-income taxpayers.

The When

Transaccts accounting app will tell you the deadlines to make payment and how much should be paid.

The What and Where:

Estimated Taxes can be somewhat complicated to calculate. The IRS provides a {form} that you can use to manually calculate estimated payments. Most accounting software will do this for you.

Use Transaccts to save all your business receipts and documents digitally, then process them with income and expense items at your convenience. Your accountant can also assist you with this.

Once your documents have been processed, Transaccts will automatically calculate what should be withheld from self-employment income and remitted to the IRS.

The How

You can make Estimated Tax payments by check or online.

For payments made by check or money order, do the following:

1. Make check payable to “United States Treasury”

2. Fill in the proper amount you wish to pay

3. Fill out a Payment Voucher, which can be found on page 9 or 11 of the [2017 1040 ES Form]

4. Be sure to sign and date the check

5. Write your SSN and “2017 Form 1040ES” in the check or money order memo

6. DO NOT SEND CASH!

For payments made online:

If you are making payments as a contractor, sole-proprietor, or LLC, you’ll want to use IRS Direct Pay Go here, https://www.irs.gov/payments/direct-pay, then click on Make a Payment and follow the instructions.

If you are making payment as a corporation or partnership, you’ll want to use EFTPS. Click here, https://www.eftps.gov/eftps/, and follow the instructions.

Still having IRS problems?

We can help.

Have general tax questions?

We have answers.

Join the growing fleet of truck drivers using Transaccts

Recommended for Leased Truck Drivers, Owner-Operators, and all other Independently Contracted Truck Drivers.