Income from theatre arts contracts

[jlink1]

Both my husband and I have full-time jobs. We also do contract/gig work in theatre. Our full-time work has W4 and we pay taxes. Our contract/gig work is not taxed. We end up paying a lot at tax return time and a penalty even though we both selected to have extra taken out in taxes each pay period. What more can we do to avoid a large tax bill plus penalty fees? How can we best calculate that or pay ahead?

[xmasbaby0]

You could be paying estimated quarterly payments to avoid an underpayment penalty or big tax bill for next year.   Either increase your withholdings on the W-4 for your W-2 income or start making estimated quarterly payments.

You have self-employment income for which you will pay self-employment tax for Social Security and Medicare.   You will need to use online Premium software or any version of the CD/download so that you can prepare a Schedule C for your business expenses.

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