Tax Hero Niki
Employee Tax Expert

Self employed

Hi mceasley!

 

Congrats on starting your SMLLC! Great questions.

 

1. The penalty for underpayment of quarterly taxes is based on the tax liability outstanding, calculated in three-month intervals. If your tax liability is caught up, then there is no penalty.

 

2. TurboTax has tools for this. Check out the Self Employment Tax Calculator or TaxCaster Tax Calculator. All of your income is summed together, and the tax is calculated on that. In other words, you will need to factor in your wage income, and if married filing jointly, that of your spouse's as well, in conjunction with your SMLLC income, to determine your tax bracket and tax liability.

 

You can deduct all business expenses that are ordinary and necessary in the regular course of business. For example, if you are a remote teacher, it probably does not make sense to deduct mileage if you aren't driving to your clients, but you can deduct your internet and equipment costs. TurboTax has a great guide for this. Just keep track of everything you spend on the business.

 

3. Yes. See answer to 2.

 

4. It depends. Check out the calculators in answer 2. You also have the option to increase the amount your W-2 job is withholding, instead of sending in quarterly payments. It all goes to the same place.