This is a truncated version of the EFA Chicagoland Chapter News. If you would like to read the full e-newsletter, visit the archive, where you can also subscribe to have it delivered to your inbox monthly.
- Editing Slog. We’ve all had a project that, even if it began as interesting and pays well, becomes a joyless slog. Caitlin O’Brien offers nine “dopamine hacks” for getting through it.
- Stay On Target. It’s resolution-making time again! This year, harness these “behavioral insights” to keep yourself on track.
- Bison Alert! “Oh, give me a home, where the buffalo roam…” the wilds of Lake and McHenry counties. An American bison escaped a farm in September, wandering about since—though she was recently spotted near home. No word on if she found any deer or antelope with which to play.
Automate Your Estimated Tax Payments
In a recent Forbes article, Amber Gray-Fenner explains the difference between deductions and credits, marginal and effective tax rates, and how some self-employed (SE) individuals can owe a surprisingly large chunk of change in SE taxes even when they owe very little in income tax. (Hint: They didn’t pay their quarterly estimated [ES] taxes throughout the year.)
Paying your ES taxes, in the paraphrased words of my mother, “Ain’t fun, but it’s gotta be done.” (She was talking about cleaning the toilet, but you get my meaning.) You can make it a lot easier on yourself by automating your payments through the Electronic Federal Tax Payment System (EFTPS) and MyTax Illinois (or your state’s revenue department website).
As Gray-Fenner writes, “effective tax planning needs to be proactive, not reactive.” And what’s more proactive than a set-it-and-mostly-forget-it payment plan? While it’s a bit fiddly to set up, once it’s done it’s done (though you do need to transfer money into and monitor the dedicated account, as well as schedule each year’s quarterly payments). The steps are:
- Open a Dedicated Account. Open or dedicate a checking or savings account to hold your tax money. This is all that this account will be used for, so we suggest finding the highest-interest savings account you can since every bit of interest earned is money in your pocket.
- Enroll in EFTPS and MyTax Illinois. Warning: These are government sites, so they’re not always user friendly or prettily designed. Take your time and follow the directions. See How to Enroll on EFTPS and the Authentication Guide on MyTax Illinois for guidance.
- Schedule Your Payments. When you file your income taxes, calculate your ES taxes for the coming year. If you use an accountant or tax software, they can generate ES tax vouchers for you. Schedule your federal and state ES tax payments using the information—due date and amount due—on the vouchers. Note: EFTPS payments must be scheduled by 8 p.m. ET at least one calendar day before the tax due date.
- Transfer and Monitor (Rinse and Repeat). Whenever you receive nonemployee income (i.e., money from freelancing, gig work, side hustles, some investment accounts), transfer at least 20% (if not more) of it into your dedicated savings account. Set reminders of the due dates on your calendar and, when those dates roll around, make sure you have enough money to cover both state and federal taxes in the account. Also make sure the proper amounts were withdrawn from the account by the IRS and the Illinois Department of Revenue (IDOR). Alternatively, you can fund the account with the full amount of ES taxes due that year—but you will still need to pull a percentage off of all incoming nontaxed income to ensure you have the funds to pay income tax.
If you’re not sure you need to pay quarterly ES taxes, Laura McCamy writes at Insider that if you will owe $1,000 or more, you probably do. She provides five steps to figure out if you need to pay ES tax, how much you’ll owe, and options for making the payments.
“Quarterly tax payments don’t have to be a hassle,” she writes. But in order to avoid any penalties or interest “so you don’t end up with an unmanageable bill on tax day,” paying your ES taxes throughout the year is the way to go.
For more information about ES taxes (including alternative ways to submit payments), see:
The last ES tax payment for 2021 is due Jan. 18. For 2022, the due dates for quarterly ES taxes are:
- Q1: April 15 (IL) and 18 (US)*
- Q2: June 15
- Q3: Sept. 15
- Q4: Jan. 15, 2023
*Note: April 15 is a legal holiday in Washington, D.C., so the due date for Q1 may differ. To be safe, schedule your payments for a week or a few days earlier.
ASBPE Adds B2B Recorded Webinar Library
Webinars include the full Charting B2B’s Path Forward series, navigating workplace sexual harassment, and managing and growing your freelance business.
PODCASTS TO PONDER
By Amy Spungen
- The Writer’s Co-op, “The Six-Figure Freelance Obsession.” There is so much emotion behind the concept of earning six figures as a freelancer. Hosts Jenni Gritters and Wudan Yan dig into the obsession and explore the context behind those numbers. (Episode 4, Dec. 6, 2021)
- The Freelance Fairytales, “How to Deal with Difficult Freelancing Clients.” Though young, Alexandra Fasulo is a veteran of Fiverr (with its buyer–seller model) and has dealt with many challenging “buyers” in her six years as a freelance writer and editor. She packs a lot of good advice and perspective into this relatively short episode and says, “It’s a numbers game—every 1 out of 20 buyers is going to suck.” (Episode 13, April 27, 2021)
- The Editing Podcast, “Three Ways to Tackle Editorial Marketing Overwhelm.” Hosts Louise Harnby and Denise Cowle discuss marketing and offer several tips, as well as advice on following your own path and developing a strategy that’s appropriate for you—even if others do things differently. An oldie but a goodie. (Episode 61, Nov. 25, 2020)
For media- and publishing-related conferences, webinars, and other events of interest to self-employed editorial freelancers, see the Media Types Omnicalendar.