Hello,
I will include a link for you to bookmark with detailed information. You need to file your estimated taxes quarterly though. If you pay them annually the IRS may charge you a penalty. The best way to pay your quarterly payments is to set up an account at IRS.gov. By doing this you will be sure the IRS received the payment plus you will receive a digital receipt immediately. When you reach their page enter "estimated tax payments" in the search bar and it will lead you to the steps necessary to do this. https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-guide-to-paying-quarterly-taxes/L6p8C53xQ
You can submit annually but it would be smart to pay quarterly to avoid penalties. You know your business and if you believe you are making more than $1,000.00 of net income than you can calculate your self-employment taxes, which is your Social Security and Medicare as employee and employer(15.3% = 12.4% SS + 2.9% Medicare). You can file payment at https://www.irs.gov/payments.
Thank you! Also, I am in Graduate school. How does that influence taxes if at all?
That's awesome you are in Graduate school congratulations! this won't affect your self-employment taxes but you may be able to take advantage of education tax credits. here is a link to explain it in more detail: https://turbotax.intuit.com/tax-tips/college-and-education/bigger-better-college-tax-credit/L5IUvpspl.
Good luck on all your endeavors!
does turbotax ask if I've made these payments when I do my yearly taxes? My specific situation is that my wife is self employed and I am employed at a public company. we file jointly. i don't ever remember paying these taxes for her. Does turbotax ask this question and then include the payments I should have made for this plus a penalty?
TurboTax software doesn't always ask this question. You should type in the topic search for "estimated tax payments". On the left side of your TurboTax online account you should see a black banner. Towards the middle of the banner you should see the words "Tax tools" click on that and a dropdown box should appear. Click on the word tools then you should see a place to enter "Topic search" once you enter "estimated tax payments" in the search bar click find button and it will take you to the exact place to enter those payments you made. There will be four separate places to enter the payments based on the dates they were due.
If I'm paying for a turbotax feature for self-employed why would turbo tax not ask this question? We've never made these payments and now I'm concerned regarding this situation.
As a follow up did you owe the IRS last year? If you did the software will generate vouchers that will show you an amount to send in an amount quarterly. If you did not owe the IRS then you probably were not assessed a penalty. Moving forward it's best to make those quarterly payments that you estimate will be owed.