I received a non-recurring payment from my employer for an earn out that we received from our acquiring company. This payment to me is classified as 1099 income, so I'll need to pay both employee and employer FICA taxes on this amount. This payment occurred in April, and I live in California, so my first quarterly tax payment is due on 10/15, due to the tax filing relief.
My other income, which represents the majority of income, is W-2 income.
When calculating the safe harbor amount (90% of current year tax or 110% of prior year's tax), do I need to account for Income Tax only or FICA taxes as well?
Related, is there a tool in my existing Turbo Tax account that would allow me to input all of my expected 2023 income and deductions, while also referencing my 2022 tax information, to confirm the amount of quarterly taxes that I need to pay?
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Hello Erickmelson05,
Happy to answer your question, hope all is well with you! When calculating safe harbor, it includes all tax liability (ordinary and self-employment taxes).
TurboTax definitely has such tool to help you change your expected income and deductions for 2023. You will find this tool under, other tax situations/W-4 and estimated tax payments. You will see that it brings the 2022 tax information and on the right side, it will have blank boxes for your to fill in for 2023.
Hope this helps answer your questions.
Cheers,
Laura
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