1) Would i be subject to the 15% SE tax even though i pay taxes on my w-2? I claim my children on my w-2 employment. Im not sure my withholding from my w-2 is high enough to cover the 1099 taxes. Yes. Whether or not you have W-2 income does not affect how your SE income is treated. You will still need to pay SE taxes on the $16,580. You should be making quarterly payments on your SE income. There are 2 parts to your 1099-NEC income taxes. One is the 15.3% SS and Medicare taxes. Although it is reconciled on your tax return, the rest of your income does not affect how much tax is owed on it, unless you reach the FICA tax cap. You are simply paying your share and he employers share of the FICA taxes instead of having your employer pay half and withhold the other half from your wages. The second part is the ordinary income tax. This can vary based on the rest of your wages, your dependents, your credits and deductions.
2) For the 1099-NEC can i opt out of paying quarterly taxes and pay at the end of the year or does that subject me to penalties? (this is my first year filing a 1099-NEC combined with my w-2) Even if i have both incomes? No, you cannot opt out and pay at the end of the year. Yes, it does subject you to penalties even if you have both incomes UNLESS you would increase your withholdings to cover your SE Taxes. You would do this by changing the numbers on your W-4 and have an additional amount withheld on box 4c, that would cover your additional taxes from Self-Employment. So if your tax liability increased by $3,000 for the year because of your SE and you expect to make pretty close to the same amount, then you would divide that by the number of pay periods you have in a year and enter that in box 4c. This would work if you were able to pretty accurately determine how much income you will have from Self-Employment in 2025. Otherwise, it is best to make the payments each quarter as you go.
3) In order to have a lower potential 1099-NEC liability Tax how high should my w-2 be for a family of 6? This would depend on multiple other factors such as your spouses income and the age of your dependents, if you have child care expenses and what other types of credits you are eligible for. Non-refundable credits will NOT reduce your 15.3% SE tax. Refundable credits will not reduce it, but since it is basically like cash back, it can offset your SE taxes. It is possible that if your spouse had no other income and some or all of your children qualified for the full child tax credit, that you would end up with a net refund. However, since the IRS is a Pay As You Go system, you still may see a penalty on your return even if you are getting a refund because you would not have paid during each quarter as you were supposed to.
4) If i itemize with the 1099-NEC Schedule C does that potentially lower the amount of what i would owe on the 1099 wages? On your schedule C, you will claim expenses that were associated with your business. You cannot claim any type of personal expenses on your Schedule C. Itemizing deductions is not the same as business expenses. You can either claim Itemized Deduction or the standard deduction. For a married couple filing jointly, your deduction would be $29,200. You would add $1,550 per person over 65. The total itemized expenses would need to be greater than your standard deduction below in order to benefit from your expenses.
5) If i have to pay quarterly taxes how do i know if i would be owing $1000 or more? Does that depend on the earned income amount? You can use estimated taxes in TurboTax, as you go through the rest of your TurboTax return, you will come to a section near the end that asks you about estimates for next year. Using this estimator will help you determine how much you will owe next year. There is also an IRS estimator tool you can use. Remember, these are tools based on input you give. If your numbers change during the year, you may end up owing more, so each quarter you should double check the numbers.
A Guide to Paying Quarterly Taxes
Standard versus Itemized Deduction
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