> I'm also pretty sure (I'm not an accountant) the first year you're self employed you won't get penalized for not paying quarterly taxes. I'm only chiming in

> I'm also pretty sure (I'm not an accountant) the first year you're self employed you won't get penalized for not paying quarterly taxes. I'm only chiming in here since I've become somewhat of a reluctant expert on estimated taxes over the years (assuming we're talking about the U.S. here; apologies to those outside the U.S.). And it happens to be fresh on my mind, since I tackled my Q1 taxes yesterday. ;) I've never heard anything about an exception for one's first self-employed year, so be careful with this. (But hey, the tax code is huge and complex, so I may just not know about it.) Although if you also have withholding from a W-2 job, it may cover you. Generally, everyone is supposed to pay a certain amount of estimated taxes throughout the year, self-employed or not. But for most people this will happen automatically through W-2 withholding. I suppose it could be a rational move to not worry about estimated taxes the first year, focus on your business instead, and eat any penalties/interest. (You wouldn't be the first to do this.) Or you could just make a guess on what you might owe, and send some money in advance of each estimated tax deadline. If you underestimate, I suppose the penalties/interest would be a lot less than if you avoided it altogether. If you overestimate, you get a refund (or if you choose, a carry-forward to the following year). Or you can do what I did 15 years ago, and spend a weekend studying IRS documents to understand how it all works, set up spreadsheets to calculate estimated taxes using the annualized method, and perform some minimal maintenance on it each year thereafter.