When tax season rolls around, freelance and contract workers may find things more painful than most. Since their payment structures don't withdraw for taxes, benefits, or Social Security, they have to foot the bill on the back end — sometimes all at once. Watching 20 percent or so of your annual earnings disappear into the IRS can send anyone into a tailspin, especially when getting paid at all can be such a hassle.
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To rub salt in the wound, if you haven't been filing your taxes each quarter that you're earning as a freelance worker, the IRS can slap you with fines, sometimes topping hundreds of dollars. For the 2018 tax year, however, we may be getting some actually relief. CPA Jonathan Medows tells the Freelancers Union blog that the IRS is automatically waiving the estimated tax penalty "for over 400,000 eligible taxpayers who have already filed their 2018 federal income tax returns but who didn't claim the waiver."
The matter isn't quite so straightforward as "freelancers never have to pay the estimated tax penalty again," however awesome that would be. But it comes as part of a set of weirdly reasonable reforms, like the IRS not requiring your estimated taxes to come in four equally spaced installments. In short, keep an eye out for paper mail from the IRS, one notifying eligible taxpayers about the change and, about three weeks later, a refund check. Head over to Medows' website CPA for Freelancers for more notices and tips like this one.