@Icekitties wrote:
Hopefully last few questions, federal would be easy to figure out since it would be 10%. For FICA (15.3%) , is that goes to state taxes under state (ri) taxation as estimated taxes for se 1040? If so, is it the same one I use to do state taxes too? Which means if FICA and state taxes are all in one as estimated taxes to pay all at once to do se 1040? At least do know for state tax is 3.75%
I feel there are some things missing here.
You file one tax return for the whole year that reports ALL your income, deductions and credits and calculates your tax. You must report this income on your tax return with all your other income. While you may (and maybe should) make estimated payments during the year, that does not substitute for including this income on your tax return. You must report all your income to calculate the tax owed. You also get credit for all your payments. If you overpaid, you get a refund.
We have not discussed whether this should be reported as a hobby or business. Hobby income is subject to income tax but not the 15% self-employment tax, but you can't deduct business expenses (if you have any). Business income is subject to both income tax and self-employment tax, but you are allowed to deduct ordinary and necessary business expenses if you have them. The factors used to tell if your activity is a hobby or business are listed here.
https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax...
Very briefly, if you engage in the activity regularly in a businesslike manner, intend to make a profit, actually make a profit, and rely on the funds for living, that tends to show it is a business. If you do the activity primarily for recreation, and you have enough money from other sources to pay living expenses, that tends to show it is more likely a hobby.
If the tax on your income will be more than $1000, you need to make estimated tax payments. You should make estimated payments even if your tax will be less, because it will help you avoid penalties, and if you pay too much, you will get it back as your refund.
You make one estimated payment (per quarter) to the IRS that includes both self-employment tax and income tax. If this is a business, the SE tax part of the estimated payment should be 15% of net profit (that's close enough). The income tax part could be anywhere from zero to 36% tax, depending on your other income, deductions and dependents. We can't guess without knowing more about you. If it is a hobby, there is no SE tax component. So the final estimated payment could be anywhere between zero and 45%.
Estimated payments for state income tax are paid separately, directly to the state. The Rhode Island portal for making estimated income tax payments is here.
https://tax.ri.gov/online-services/make-payment-online
