@VolvoGirl
Thank you so, so much for that. For the life of me, I could not figure out how to prepare estimates for next year. I also didn't know a 1099-MISC is replaced with a 1099 NEC.
Your steps greatly helped. Using your instructions, I signed back onto my TurboTax account, and got back into the estimated tax payments section. Then I went through the TurboTax steps for "amending" my 2019 return (AFAIK I don't think I saved the changes)
In 2020, I have worked as both a sole proprietor / individual contractor with no employees and as a W2 part-time employee. I entered my 1099 (self-employed / independent contractor) income, my part time W2 income and my investment income.
These are the results and the Turbo Tax screens I saw:
- 2020 Taxable income: $229,897
- 2020 Taxes: $67,156
- 2020 Federal Taxes that will be withheld (from part time W2 income): $17,795
Screenshots from TurboTax "Estimated Payments" section:
It seems I owe estimated payments of: $10,662*4 = $42,648 for 2020.
They seem to have got this number using: (90% of $67,156*) - $17,795 (Federal Taxes that will be withheld)
Is there a disadvantage or penalty to using 90% instead of 100% on "(screen 3) Estimated payments calculation method"? What do you recommend?
2. (this is also what I sent to @TomYoung above)
I'm confused when the interest starts accumulating, according to this article: https://www.irs.gov/businesses/small-businesses-self-employed/interest-for-individuals
It says that "interest starts on April 15, if your return shows you owe tax."
But it also says: "Interest on the failure to pay, estimated tax, and dishonored check penalties starts on the notice date of that penalty amount." - I havent received any notices from the IRS.
Is there a way to find out how much interest I owe for my late payment? Or do I have no choice but to wait until tax time (April 2021) when I file my return?
3. Most importantly, what do I do next? The next steps are a bit confusing after screen 5 (above) in TurboTax .
Do I:
- print vouchers somehow from within TurboTax?
- Or do I directly go and pay on the IRS website (and pick 2020 1040ES payment)? https://www.irs.gov/Payments
Anything I am missing?
Can I get rid of my "Intuit Self Employed" subscription (I believe this is the same as / like Quickbooks)? I just subscribed to figure out how much I owed in estimated payments for 2020. I guess it could be useful to keep accurate records for the business going forward.
Thank you for helping again!
