Yes, you only need to pay the estimated taxes for expected business income, since your husband has withholding done on his wages through his employer. In your example, your estimates should cover the $1500 of tax liability generated from the business.
You do not have to pay estimates to cover your husband's earnings. He could give his employer an updated W-4 form if he wanted to have a little more, or less, withheld each pay period. You could increase his withholdings through his employer to cover your expected business income and not have to make estimated tax payments. You will have to decide what the best option is. You could leave his withholdings as is to cover his earnings and make estimated tax payments based on your business OR you could increase his withholding enough to cover his wages and your business income.
The IRS levies underpayment penalties if you don't withhold or pay enough tax on income received during each quarter. Even if you paid your tax bill in full by the April deadline or are getting a refund, you may still get an underpayment penalty. So, your estimated tax payments + your husband's withholding = your total tax payments.
Go through the estimated taxes for 2025 in TurboTax and let TurboTax prepare your estimates for you. You will be able to factor in your husband's earnings and withholdings. In TurboTax, you can go through the estimated taxes for next year section. If you already filed your return, you will need to click on Add A State at the bottom of the home page to access your return. You can do this for your federal taxes and your state taxes, if applicable. You can also, enter your expected income and deductions in TurboTax or Tax Caster to get a feel for 2024's taxes.
Estimate next year's federal taxes
Estimate next year's state taxes
Your last paragraph is correct, except that if your husband does not withhold enough during the year, that too, can cause a penalty. Any quarter for which you don't have enough tax payments (or withholdings) can generate a penalty. And you do not have to make the estimated payments if it turns out you estimated your income too high. You are not required to make the estimated payments. For example, let's say you estimated $5k income for qtr. 2 and made the payment. But it turns out, you did not make anything that quarter, you could adjust the next payment. Since they are just estimated tax payments, they are not set in stone once you print them - you can always pay a different amount than what is on the payment voucher, or not pay it at all.
Line 16 of Form 1040 is your ordinary income tax, but you also must factor in Line 23 to cover your self-employment tax for the business. Line 24 is your total tax.
Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.
Topic 306 - underpayment penalties.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
