The U.S. tax deadline passed on Apr. 15 and you hustled to get your tax forms filed on time. Congratulations! (And if you missed the deadline and got an extension, Oct. 15 is the final deadline for individual tax returns.)

Before you get too excited and push your taxes to the back burner until next year, be sure to check: are you missing an important step? As a freelancer, you may need to make tax payments during the year. Missing them could result in interest charges and penalties—not to mention an unexpected tax bill.

Here’s a look at why holding onto your money could cost you and what you can do to help avoid surprise fees.

An estimated tax payment in 2019 could help avoid a penalty in 2020

In the U.S., taxpayers are generally expected to pay at least 90 percent of their taxes during the year. That money goes to the government through one of two methods:

  • Tax withholding, which is money withheld from a paycheck by an employer and submitted to the IRS on your behalf
  • Estimated tax payments, which are taxes you need to pay on any income you earn or receive that isn’t subject to withholding

You may need to make estimated payments if you:

  • have multiple jobs—especially if your employer does not withhold sufficient taxes
  • are self-employed, an independent contractor, or otherwise participate in sharing economy activities where you are not working as an employee
  • are a representative of a direct-sales or in-home-sales company
  • receive pension income

You can use the IRS Withholding Calculator to do a Paycheck Checkup. This tool will help you determine whether you need to make additional payments in order to avoid an unexpected tax bill or underpayment penalty when you file your tax return next year.

Payments should be paid on an ongoing basis with quarterly deadlines on:

  • Apr. 15
  • Jun. 15
  • Sept. 15
  • Jan. 15

Stay informed

To learn more about estimated payments and your tax requirements, check out these resources from the IRS:

  • Sharing Economy Tax Center – This tax center provides information and tips to understand the potential tax issues.
  • Estimated Taxes – Taxes must be paid as income is earned or received during the year, through withholding or estimated tax payments.
  • Publication 583, Starting a Business and Keeping Records – This publication provides basic federal tax information for people who are starting a business. It also includes information on keeping records and illustrates a record
  • Small Business and Self-Employed Tax Center – This is a one-stop resource to help business owners and it contains links to information about preparing, filing and paying taxes, the stages of owning a business, online learning, and other general topics.

You can also get hands-on tips to help prepare for tax time, keep your financial information organized, and stay on top of your bookkeeping.

Need help preparing your tax return? Learn more about choosing a tax professional or find an expert on Upwork.

This article provides general information only. This article does not address all tax issues for freelancers, may not contain current or complete information, and cannot and should not be relied upon as legal or tax advice. Readers are strongly encouraged to seek tax advice based on their particular circumstances from an independent tax advisor.