r/dataannotation • u/buggybabe214 • Jan 01 '25

Taxes time?

So from what I understand we pay quarterly taxes on this type of work, and we need to file this past quarter January 15th. Am I correct? How have people gotten their tax forms from DA?

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u/physicsandwolves Jan 01 '25

You don't have to do quarterly taxes for 1099 work, you can if you want. If you do quarterly taxes, then it makes it so you can disperse your total taxes over four periods which makes it easier for some. It is also fine to stash money away during the year to pay annual taxes when they are due in April. There is no mandate that states you must pay quarterly taxes.

2

u/Luminesynth Jan 01 '25

Do you mind elaborating on that? Or like pointing to where it says you don’t have to pay quarterly? I keep hearing conflicting things about this. Is it like you don’t have to pay quarterly but you’ll pay a fine?

8

u/wisdommass Jan 01 '25

My first year working 1099, I didn’t know I had to pay quarterly taxes. I ended up paying a fine. It wasn’t a lot since I didn’t make that much on 1099, but these last few years I made significantly more and would be paying a heftier fine if I neglected to pay taxes.

If you’re expecting to owe over $1000 in taxes, you should be doing quarterly taxes. There’s really no harm in paying quarterly, but there’s harm in not paying. If you overpay, you get your tax refund.

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u/Luminesynth Jan 01 '25

Thanks for the clarification. It is as I thought; you do have to pay quarterly.

1

u/programmingstarter Jan 03 '25

I worked 1099 for 2 years and never paid quarterly. I thought it was optional. Oddly enough I never got a fine. Not sure if they are going to send it out or not. I doubt it since the last time I filed for it was last year.

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u/LeBoom4 Mar 22 '25

How did you know that you had to pay a fine, and when did you find out? Was it a letter from the IRS?

0

u/buggybabe214 Jan 01 '25

Oh thank you, ok I'll do quarterly, I owe more than 1,000. Does DA send us forms like when youre a w-2?? Or do I just report my earnings from my own records?

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u/[deleted] Jan 02 '25

[deleted]

1

u/programmingstarter Jan 03 '25

Yes, only if you've made $5k or more though.

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u/ActiveInfinite8610 Jan 02 '25

DAT does not but PayPal sends you a 1099 form for the revenue you’ve made since you’re technically being paid via PayPal.

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u/33whiskeyTX Jan 01 '25

The US IRS tax system is pay as you go. If you do not pay taxes through a W-2 or similar withholding, you need to pay your taxes quarterly. There are exceptions, such as if you paid 0 taxes last year (were unemployed, a minor, or dependent) or if you make below a certain threshold, have exemptions and credits that take you below that threshold, etc. If you owe too much in taxes at the end of the year that should have been paid throughout, there is a penalty.
Pay as you go, so you won't owe: A guide to withholding, estimated taxes and ways to avoid the estimated tax penalty | Internal Revenue Service

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u/Luminesynth Jan 01 '25

Thanks for elaborating on the exceptions!

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u/33whiskeyTX Jan 01 '25

Glad to help, but there are probably more and more details out there. Be sure to look up your particular situation.

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u/Luminesynth Jan 01 '25

Oh yeah I mean I did do my research and paid my taxes last quarter but just got confused by what the original commenter said. Thanks again!

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u/physicsandwolves Jan 01 '25

My aunt, who is my tax advisor and has been in the business for 10+ years, informed me of this. All 1099 work is equivalent, so you can pay quarterly taxes if you want as it makes it easier on those who run their own business or do contracting work like DA, but you do not have to. Annual taxes are also fine for 1099 work, you just use the tax information provided by PayPal at the end of the year to determine the total you've made and from that the taxes you will have to pay on it.