Whether you need to pay estimated taxes depends on your situation. There are so many variables. Is the $6,000 income before business expenses or after business expenses? Do you currently get a large refund that may cover the increase in self-employment (SE) tax and income tax?
- The rule is that you must pay your taxes as you go throughout the year through withholding or making estimated tax payments.
- Your estimated taxes are due each quarter if you have a gain or profit (income less expenses) from your business. If you have a loss one quarter, you don't have to pay estimated tax.
For self-employment income taxes, you need to factor in the fact that you pay self-employment (SE) taxes in addition to federal income taxes and state income taxes (if applicable). The SE tax rate is 15.3% with 12.4%for Social Security and 2.9%for Medicare.
Scroll down to Do I need to pay estimated taxes? to determine whether you need to make quarterly estimates.
If you do need to make estimated tax payments, scroll down to How should I figure what I owe?
One way to estimate what you need to pay is to create another Online account in TurboTax and enter all your 2022 income, deductions plus your estimated self-employment income. It's free as long as you don't print it.
- You'll be able to get a good estimate of what your tax will be for the year and whether you'll need to make estimated payments or not.
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