<prompt> Human: I currently have a full-time job with a base salary of 85,000. Last year I received a bonus of 2,000. My bonus this year can be anywhere in the range of 0 - 5,000. I just filed my 2016 taxes and I owe about 260. No big deal, but I am now worried about next years taxes...I just accepted a part-time consulting contract that I will do on top of my regular full-time job. This will pay 9,000month and I will be considered an independent contractor with that company. This contract is with a company with which I was previously employed for about 4 years so I know its not a scam just in case anyone was wondering this was too good to be true that a part-time gig is paying me more than my day job. The contract is expected to last only 3-6 months. There is also an opportunity for a 15,000 bonus. Therefore, I could be receiving anywhere from 27,000 to 69,000 of additional untaxed income. What do I have to do taxes-wise to prepare for this? I have read through the IRSs estimated tax payments article, but Im still confused. Does this apply to me? Do I have to make estimated tax payments? I wont have a problem paying the taxes next year if I have to do it in one lump sum. I will be setting this additional income into a savings account and pretending it doesnt exist until all of the taxes are fully resolved on it. Ideally, I would love to wait until next tax season to pay it all in one lump sum, but I dont want to be penalized for doing so. Can anyone help point me in the right direction as to what the proper procedure is?  <response>: Does this apply to me? YesDo I have to make estimated tax payments? ProbablyI wont have a problem paying the taxes next year if I have to do it in one lump sum.True, but if you owe 16k in taxes at tax time you will be subject to penalties for not making quarterly payments throughout the year. However There is one alternative to making quarterly estimated tax payments: Significantly increase your withholding at your regular job enough to cover the approximate amount of taxes you will owe on the self employment income. You should read the IRS docs on Underpayment penalty Avoiding this is the whole reason you make quarterly estimated payments or increase withholding at regular job 