“If you booked $10,000 of income in that first quarter, you are likely to make $40,000 this year from writing,” Tice explains. “If you billed $2,000 in the first three months, you’re probably not going to crack ten grand for the year. That only projects to $8,000.”
Using Carol Tice’s formula, I can anticipate earning $70,000 gross this year—that’s before taxes and business expenses. This is a little higher than what I’ve earned over the past two years, which is a good sign.
The first time I had to request a tax extension—because I was a new freelancer who tried to DIY my taxes and realized I was in over my head—I felt like a failure. How could I miss such an important deadline? Would the IRS be mad at me? Would I have to pay a bunch of penalties?
The answers to the last two questions, at least, are no and no. The IRS will not shame you for filing an extension (like, how would they even do that), and you don’t get charged a penalty for filing the extension request. All you have to do is file a simple form, pay any outstanding taxes you think you owe, and you’ll have an additional six months to complete your tax return.