Self employed

Hello,

I'm happy to help you with your questions today. 

1) The rule for estimated taxes is for total taxes, not just self-employment.  If you are an individual (1040 filer), partner or S corporation shareholder, and  you expect to owe tax of $1000 or more when the return is filed, you should be making estimated payments.

2) If your only tax that you expect to owe is $765 (for example if the taxes on your wage income is accurately withheld) then you would not be expected to make estimated tax payments and can pay the amount due with your return filing.  Generally, most taxpayers will avoid any underpayment penalty if they owe less than $1000 after subtracting withholding and credits.  However, you should consider whether you owe income tax on your self employment income as well as the self-employment tax.  The combination of the income tax and self employment tax could push your over the $1000 threshold, depending on what other income you have on your return (retirement or investment income, spouse's income)

Have you considered having the extra tax from your self-employment income withheld from your paycheck?

You can find more information here about estimated taxes here: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes#:~:text=Individuals%2C....

Here is a link with more information about tax penalties: https://www.irs.gov/taxtopics/tc306