Yes, whenever you are issued or expect to be issued a 1099 NEC, you will owe taxes at the end of the year. This includes both income taxes and self-employment taxes (FICA and MEDICARE). Depending on the amount of taxes owed, you could be assessed an estimated tax penalty if you did not submit enough estimated taxes.
Here is a guide that the IRS publishes. Here is a summary of the guide.
- Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
- You don’t have to pay estimated tax for the current year if you meet all three of the following conditions.
- You had no tax liability for the prior year
- You were a U.S. citizen or resident alien for the whole year
- Your prior tax year covered a 12-month period
To determine how to figure your estimated taxes, look in the the How to Figure Estimated Taxes section in the guide.
To make estimated tax payments in Turbo Tax:
- Open your return
- Go to federal>other tax situations
- other tax forms>Form W4 and estimated taxes
- If you owe taxes this year, the four payments should be already populated in the return. If not, you can record 4 equal payments here from the amounts you determined you should pay for the year when you figure what your estimated taxes should be.
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