- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Self employed
Hi again.
Here is a link to the Tax Caster for the self employed. https://turbotax.intuit.com/tax-tools/calculators/self-employed/.
This will help you calculate your tax liability and thus, what you should pay in estimated taxes.
But to expand further on your questions, yes, your spouse's income absolutely counts. You want to continue filing jointly to get the larger deduction, and some other credits, as well. She might want to consider increasing her withholding, as well.
The SE (Self-Employment) tax covers your Social Security and Medicare, which in a W-2 job would be paid by your employer. To use your numbers, if your gross revenue will be $80,000, you will want to offset that with all of your expenses, including health insurance you purchase for yourself, rent on your chair, all your supplies, etc. These are all reported on your Schedule C, which is attached to your 1040 return. TurboTax self employed has a feature which populates expenses for your industry and you just fill in the numbers.
The estimated tax payments are based on your profit, not the gross income. So yes, the expenses come into play. And yes, TT will estimate the taxes based on your and your wife's incomes. This is a lot easier in the second year, when you have a history to go by, but you are also allowed to deduct startup costs the first year.
It is a good idea to make payments quarterly to keep in line with your actual income for that quarter, so you don't get behind and have to pay penalties.
Hope this is helpful.
Annette