All Posts

1) Yes, you are right!! Any "extra" withholding you're already taking out specifically to cover your husband's self-employment earnings directly reduces the amount you'd otherwise need to pay via estimated taxes. 2) If your husband paid taxes in his birth country on the sale, you can usually claim a Foreign Tax Credit on your U.S. tax return (Form 1116) to offset your U.S. tax liability on the same income. This helps avoid double taxation. Keep careful records of any foreign taxes paid. Add this estimated U.S. tax liability (after any foreign tax credit) to your overall estimated tax calculation for the year. You can then adjust your remaining quarterly payments (or make an additional payment for the quarter in which the sale occurred) to cover this new income.   @PadillaFam Thanks again!!

Yes. taking into account what you have already paid is fine for making the estimated tax payments. For your second question, the value/basis of the property is usually the appraised value at the time of the inheritance. Gain is the difference between that appraised value and the price at which you sell the property. That being said, this amount maybe different in your case based on the tax treaty between USA and his birth country. Nisha

Thanks!   So for Question 1, the extra money I would send in would not be anywhere near a quarter because I am already taking extra withholding to account for his earnings. But I would estimate how much extra I should pay, taking into account the withholding that I've already paid. Is that fine?   For Question 2, now I have questions about how much money I should send for the sell of the foreign property.  I do know anything about this; we have never sold a property in the US or abroad before!  I know we had the property appraised before selling. Is the taxable amount the different between the appraised value and the amount we earned on selling it? Also, we had to pay an incredible 20% sellers tax  to the foreign country. I don't believe the US will tax us for that, right? How should I take that into account when I estimate how much to send in for Quarterly Estimated Tax?  

Hello Padilla, Let me answer your first question first: You will want to calculate your estimated quarterly profit and then your estimated taxes based and pay based on that estimate.  You’re responsible for all of your FICA – Social Security and Medicare – along with income tax on your profit.  FICA is going to be 15.3% and your income tax will be based on your overall taxable income bracket.   It is great that you are withholding more money from your Wages to cover the estimated taxes required for his income but it is crucial that you make correct estimated tax payments.  Determining what to pay and when is crucial to avoid penalties and interest on underpayment of tax.  Here is a great resource on how to pay estimated taxes.   Now for your second question: 1) You should make an estimated tax payment based on the gain on sale of property. This is the same as having sold an inherited property in the USA. The difference here is that when you file your 2025 tax returns remember to take any Foreign tax credit for taxes paid on the sale of this inherited property in his birth country. The thing to keep in mind about the foreign tax credit is that it is paid or accrued. Some countries do not have a calendar year for taxation reporting. So say the tax filing in the foreign country is not till after 4/15/26, and you do not pay the tax on this till the time of filing there, you can claim the taxes as accrued for 2025 tax year. To take the correct amount of tax, I would recommend filing an extension in the USA. After you file the tax return in his birth country, you would file the tax return in the USA. One last thing on the inheritance, you will have to file Form3520 with the IRS, if the amount of inheritance exceeds $100,000. Hope this helps! Nisha **Please say "Thanks" by clicking the thumbs up icon in a post ***Mark the post that answers your question by clicking on the "Mark as Best Answer"

1) Yes, you can absolutely send in extra money via Quarterly Estimate Filing if your husband's business has been better in one quarter! The IRS understands that income from self-employment can fluctuate. You are not required to pay four equal installments. You can adjust your estimated payments throughout the year to reflect your actual income. If one quarter is significantly better, you can make a larger payment for that quarter to cover the increased income. It is generally recommended to calculate the amount more precisely to avoid underpayment penalties.    Use Form 1040-ES: This form helps you figure out the estimated tax payments. It includes a worksheet to calculate the amount. Estimated Taxes: How to Determine What to Pay and When  A Guide to Paying Quarterly Taxes    2) Yes, you likely need to account for the profit from the sale of the inherited foreign property in your Quarterly Estimated Tax filings for the current year. When your husband sold the inherited property, any profit he made above his "basis" in the property is considered a capital gain and is taxable in the U.S. If you wait until you file your 2025 tax return (due April 15, 2026), you could face an underpayment penalty if you haven't paid enough tax throughout the year through withholding and/or estimated payments. The IRS expects you to pay tax as you earn income.   @PadillaFam Thanks for the question!!

Right, I'm going to wait until the HSA actually completes my request to finish amending my return, but they should do it correctly since I chose withdraw excess contribution.   The $ amount in excess will then be income on my 2024 amended return and then any interest income on the account that was generated from the excess contribution should be distributed as well and that will become other income on my 2025 return done in early 2026.   The verbiage does throw me off, but I agree that I do believe Option 1 is the correct option to choose, so it calculates it correctly.

The pre-populated other health insurance premiums paid number is populated when you enter your social security income.  It should be the same number as the amount of Medicare Part B or D premiums you had deducted from your social security benefits.  There is a specific box for the entry of those premiums from your social security benefits.   It is completely correct to have that number show up in both your social security entries and your medical cost entries.  You put it in while you enter your SSA-1099 and the program will enter it wherever else it is appropriate.  There is no need to do anything, the program is working correctly. 

These issues are not uncommon.    One thing you may do, depending on how far from a post office you are, go into a post office and explain the issue.  They have more info on their system than is shown on the USPS.com lookup.  You've already opened a case for missing mail, which would be the next step.    Have you called the IRS about this document?  If you haven't I would advise doing so. 1800-429-1040, call at 7am, your best chance of reaching a human.  If they say they have it, problem solved   If they have no record of receiving it then I would send it again, include a cover letter indicating that it was originally sent on XX/XX/2025, you were told there is no record of it being received so you are resending it.  Hopefully the agent will put in notes about the call in case the first one shows up in the meanwhile.   If mailing, send it certified mail with a return receipt requested.  That seems to be the most thorough way of tracking sent mail.    It is also possible to fax the document to the IRS.  The fax number is 844-249-8134, but if choosing this route please check the article on faxing the IRS to make sure they are still accepting faxes.  Here's the link: Form 3115     Then I would contact the USPS customer service and request a refund for the postage of the priority mail that did not arrive.  You can do that by signing into your USPS account, which you have since you set up a lost mail look-up.     Best of luck getting this resolved.  

The refund should not have gone up so much. That being said, refund could have gone up a lot more due to other credits, such as EIC, etc. I would double check the tax withheld entries for DC as well. A transposed figure can also create an excessive refund.

An LLC is a separate legal entity, but the IRS doesn’t consider it a separate tax entity.  From the IRS viewpoint a single member LLC is called a disregarded entity and is still taxed the same as a sole proprietor, unless you make an election to be taxed as a corporation using form 8832.  If you did make the election to be taxes as a C-Corp or S-Corp, you can become an employee of the corporation and pay yourself a reasonable salary, which will be an expense for the corporation.  But you will also have to file a corporate income tax return, quarterly payroll tax returns, and make payroll tax deposits via the Electronic Federal Tax Payment System - EFTPS. Here is some more in depth information on the other payroll tax implications of doing that:   Corporate Tax Overview However, if you didn't make the tax declaration with the IRS, you will still be taxed as a sole proprietor.  Our tax system is “as you go” so you will want to estimate your profit quarterly, and pay based on that estimate.  You’re responsible for all of your FICA – Social Security and Medicare – along with income tax on your profit.  FICA is going to be 15.3% and your income tax will be based on your overall taxable income bracket.     Determining what to pay and when is crucial to avoid penalties and interest on underpayment of tax.  Here is a great resource on how to pay estimated taxes.    When you file your 1040 tax return at the end of the year, if you didn’t make the entity election to be taxed as a corporation, you will file a Schedule C along with your 1040. Hope this helps! Cindy

Line 16—Amount Paid with Extension or Tax Return   On this line, enter the total of the following amounts. • Any amount paid with your request for an extension on Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return; or Form 2350, Application for Extension of Time To File U.S. Income Tax Return.   Also include any amount paid electronically in connection with an extension of time to file, but don’t include the convenience fee you were charged.   • The amount you paid with your original return, regardless of method. Also include any additional payments you made after it was filed. However, don’t include payments of interest or penalties, or the convenience fee you were charged.   Example. You are filing Form 1040-X to amend your 2024 tax return. You sent a check for $1,500 with your original return, reflecting a payment of $1,400 in taxes and a $100 estimated tax penalty/underpayment penalty. When completing Form 1040-X, enter $1,400 on line 16 (the check sent with the original return minus the $100 penalty). https://www.irs.gov/pub/irs-pdf/i1040x.pdf    @GKS1225 Thanks for the question.

Hello, Congrats on starting some freelance work in addition to your part time job! To answer your question as to how to calculate your quarterly estimated tax payments or whether to increase your withholding from your part time job, the rule is that you must pay your taxes as you go throughout the year through withholding or making estimated tax payments. If your federal income tax withholding (plus any timely estimated taxes you paid) amounts to at least 90 percent of the total tax that you will owe for this tax year, or at least 100 percent of the total tax on your previous year's return (110 percent for AGIs greater than $75,000 for single and separate filers and $150,000 for married filing joint), you most likely will not need to make estimated tax payments. You should estimate the amount of money you are going to make through your part time job and your freelancing job. Then you can use our Taxcaster tool to figure out how much tax you are likely to owe. Here is the link to our Taxcaster tool:https://turbotax.intuit.com/tax-tools/calculators/taxcaster/   After you have determined your tax liability , you have 2 options to ensure you are paying enough tax throughout the year. 1. Increase your withholdings by submitting a new W4 to your employer and have additional tax withheld to ensure you pay at least 90% of your liability or 100% of last years amount. 2. Figure out how much you still have to pay after what you have withheld from your part time job and make estimated payments quarterly for the difference. Quarterly estimated payments are due April 15, June 15 , September 15 and January 15  I hope this answers you questions! Mary, Tax expert   

This is related to the foreign dividends you received on your form 1099-DIV.  You will also have supplemental pages that indicate which countries the income was from and the tax was paid to.  If you used a RIC - Regulated Investment Company, such as Schwab Funds, or Schwab ETFs - that is the only selection you need to make.  If the brokerage is not a RIC, you could select various.  You would only need to list individual countries if the investments were made personally by you through something other than a regulated investment company or brokerage.  If you're unable to find the supplemental pages that should accompany the 1099-DIV form, you should contact the broker that provided the form. Hope this helps! Cindy

@lc2020 , as you have undoubtedly seen from this thread: (a) there is general agreement that for federal purposes, existing and in-effect tax treaty  between US and  the  other country ( China in your particular case ) dictates if the US can tax the foreign pension ( based on type of pension and past employment ); (b) NJ statutes do not clearly state whether exclusion eligibility  ( i.e. pension eligible for exclusion  ) extends to "foreign" pension -- as stated by @fanfare  " even the DOR-NJ may not have a clear answer on this ".  IMHO, foreign pensions are unlikely to have been considered  while  creating the statute.  Thus in the absence of clear guidance, it becomes a question of  (a) seeking guidance from NJ-DOR or (b) just assume that "foreign " pension  is the same as pension from any domestic source and thus eligible for exclusion. I did go back and look at both NJ-DOR instructions / comments on pension exclusion eligibility and  China Tax treaty language  ( article 17 and 18 ), --- clearly NJ instructions are addressing domestic  pension schemes.  They are silent on foreign sourced  private pension.  So my  above position/ suggestion stands.    pk    

It depends how much money you will be making on your freelance work in the current year.  If you expect to have a balance due of more than $1000 in federal taxes for the tax year, you may need to make estimated quarterly tax payments.  As an alternative, you may want to increase your tax withholding at your W2 job. Estimated Taxes: How to Determine What to Pay and When Hope this helps. Amita