For many first-time freelancers (and some seasoned vets), quarterly taxes are a nightmare. Either you don’t know you have to pay them and you’re caught off guard, or you withhold too little.
Enter: the Track.Tax app, which promises to automatically calculate how much you owe in taxes every time you receive a 1099 and set it aside in a savings account with Evolve Bank so you pay your quarterly taxes on time and in full (your withholdings do not earn interest). Essentially, you link your bank account to the app, and it will search through your deposits for freelance income.
You can also connect your expenses, which it will deduct for you, and it submits your taxes to the IRS and state government, with your approval. You cannot get the money back once it’s set aside, unless you get a refund.
You can try the app free for 30 days, after which it costs $10 per month. It includes the calculations and deductions, as well a free annual state and federal tax filing.
According to Next Avenue, the app is about 80 percent accurate at first when tracking freelance income, but learns over time. So you should make sure to double check its work, especially the first few months you use it. You’ll need to manually fix inaccuracies.
Per the website, the app does not yet take into account:
Capital gains/losses on investments
Multiple states
Social Security Income
Balance due for previous tax years
Previous IRS or State payments
So, again, you’ll want to double check everything, and Track lets you download your information if you want to show your CPA, for example.
It’s not perfect yet, but for freelancers who routinely underestimate their quarterly taxes, or are just beginning their freelance journey, it could be a valuable resource.
For more information on your quarterly taxes, check out these resources.