Side gig income and the importance of quarterly filing.

With respect to your question, whether or not you need to make estimated tax payments depends on how much money you make with your regular W2 job, the side gig, and other income,  and more importantly, whether or not you will owe taxes at the end of the year if you don't make estimated tax payments.

Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your salary or pension is not enough, or if you receive income such as interest, dividends, alimony, self-employment income, capital gains, prizes and awards, you may have to make estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax.

If you don’t pay enough tax through withholding and estimated tax payments, you may be charged a penalty. You also may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return.

Individuals generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.

So, do you have to make quarterly estimated tax payments? Well, it really depends on the numbers - if the gig income is small, and if your tax return at the end of the year shows a refund, or a balance due of under $1,000, then no, you do not need to make estimated tax payments. But if you believe that, based on the amount of gig income and other income you have, you will be in a position of owing the IRS over $1000 at tax time, then yes, you should be making estimated tax payments.

Note that states have similar rules, but different thresholds, so you should check your state income tax website to understand their rules on whether you need to make state estimated tax payments.

The IRS and TurboTax has tax calculators that you can use to estimate your taxes for the year. You can find the TurboTax Tax Calculator (note this is currently for tax year 2022, but it will give you a general idea of your 2023 tax liability as well) at this link: TurboTax Tax Calculator