Hello
I hope your day is going well. I see you have a few questions. Lets start with the first.
Do you need to pay estimated taxes on your side gig? The short answer is yes. This side gig is considered self-employment income and the IRS requires that you determine what you profit will be (income minus expenses) and then pay taxes on that every 3 months or so. Once you determine what your profit will be, you will be required to estimate two types of taxes, federal income tax and what is called self-employment tax (i.e. social security and Medicare tax).
Lets start with the the self-employment tax. That will be approx. 15% of your profit.
Now the federal income tax is a little harder. You have to estimate what you think your yearly side gig income will be and add that to your income from your full time job to determine what will be your tax rate. Here are the tax brackets for 2022 https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022
Once you have estimated your tax bracket, you take that percentage and multiple it by the profit for the three months in question and add that to the self employment tax you had estimated and send that to the IRS. Wow, what a complicated process huh.
My suggestion is first estimate what you think the tax bracket is you are going to fall into will be. Lets say it is the 22% category. So you probably will pay approximately 37% tax on any side gig profits. So every three months estimate what your profit is going to be, multiply that by 37% and send that in the IRS. https://www.irs.gov/payments
You can have your employer take extra money out and send it in to cover this but that would require you estimate your taxes for your side gig for the entire year, you then divide that amount by the number of paychecks you have remaining for the year and ask them to take out that much extra for withholding. If that is the case you would need to fill out a new w4 and put that extra amount in box 4c. Here is a link with more information on the w-4 form. https://www.irs.gov/forms-pubs/about-form-w-4
So sorry this is such a complicated process. I hope this helps.
John
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