@hyprior wrote:
I expect to file a self employed return next year as I will no doubt cross that $400 threshold by then.
I don't understand how to determine the amount I need to pay quarterly. I keep records, and right now I estimate that between when I started in June and today I owe about 300 in tax. Is that what I would submit for a quarterly payment with the idea that next quarter may be less or more, or do I need to assume I'll owe 1200 (300x4 quarters) so just pay 300 each quarter?
I worked full time last year at a company and paid taxes the "normal way."
Also, can I file to do quarterly payments electronically? I've seen the paper form and it's extremely confusing.
Turbotax is not designed to prepare the estimated taxes for you, only prepare the return at the end of the year. But it sounds like your app is doing that for you? Quickbooks and Mint are other applications that will track business expenses and help estimate your profit and taxes.
Your self-employment taxes will be 15%-37% of your net earnings after expenses. 15% for self-employment tax (the SE version of social security and medicare withholding) and 0-22% of income tax, depending on your other income. If you are single and have no other income, your first $12,550 is not subject to income tax since that is the standard deduction, and 10% or 12% after that. These thresholds will vary depending on your marital status, spouse's income, and dependents. All your earnings are subject to the 15% SE tax.
If your app is suggesting you owe $400 in tax, that means you only have a net profit after expenses of $2600? You might need better-paying gigs!
You can make electronic payments at www.irs.gov/payments. Select "2021 estimated taxes" as the reason from the drop-down menu (or it might say "2021 form 1040-ES"). You don't mail in a paper form if you pay online, and you don't need to use the paper form to calculate the estimate if you have calculated it another way.
