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rogo2020
Level 3

Form 1040ES Questions

I became a Freelancer as of January of 2019 and wasn't aware that I had to make quarterly payments throughout the year. However, I have saved up a good amount of funds to hopefully cover any fees (if any).

 

I have the following questions for 1040 Estimated Tax form. I've completed Schedule C and am I'm trying to complete 1040 ES to figure out my dues and am stuck on the 4 lines below. 

 

Line 2a- Deduductions: Where Do I find this information? Are they in various sections of 1040? 

Line 7 - Credits is this on line 12a of 1040?

Line 10. Other Taxes? What taxes are these referencing and where on 1040 would I find these? 

Line 11 b - If I have 2 children and we claim the Child Credit ($2,000) plus the ATC do I enter only $2,000 or $4,000? 

 

Any help would be greatly appreciated. 

Thanks!

2 Replies
DianeC958
Expert Alumni

Form 1040ES Questions

For Line 2a the worksheet is referring to if you are going to take the Standard Deduction or Itemized Deductions.  If you are Single the Standard Deduction is $12,200 for 2019, for Head of Household it is $18,350 and for Married Filing Joint it is $24,400.

 

If you have Mortgage Interest, Property Taxes, State Income Tax Paid, Medical Expenses and Charitable Contributions that are greater than your Standard Deduction then you would subtract that amount from Line 1.  Remember that State Income Tax Paid and Property Taxes are limited to a deduction of $10,000.

 

Line 7a are Credits that you may qualify for including:

  • Foreign tax credit. Attach Form 1116
  • Credit for child and dependent care expenses. Attach Form 2441
  • Education credits from Form 8863,
  • Retirement savings contributions credit. Attach Form 8880
  • Residential energy credits. Attach Form 5695
  •  

Line 10 refer to additional taxes such as:

  • Self-employment tax. Attach Schedule SE
  • Unreported social security and Medicare tax from: Form a 4137 or 8919
  • Additional tax on IRAs, other qualified retirement plans, and other tax-favored accounts. Attach Form 5329
  • Household employment taxes. Attach Schedule H
  • Repayment of first-time homebuyer credit from Form 5405.
  • Health care: individual responsibility
  •  

On Line 11b yes, you can claim $4,000 for Child Tax Credit if both of your children are under the age of 17 years old.

 

Since you have not made any estimated payments for 2019 you can prepare your tax return and see the amount that will be due.  To make estimated payments for 2020 you can take the amount you owed for 2019 and divide that by 4 to make the estimated payments due for 2020.  If you believe your overall income will be greater TurboTax allows you to enter the increase in income and will calculate the additional tax due when preparing your estimated payments for 2020.

 

Link for more information about Estimated Taxes

 

It is best for you to make estimated payments online at

 

Link to make estimated payments on IRS web site

 

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Carl
Level 15

Form 1040ES Questions

I've been self-employed for 15 years now. In my opinion (we all have one) using the worksheets is an absolute waste of your time and effort. If you expect your gross household income from all sources for the entire year to be less than $100,000, just send the IRS 20% of your gross business income each quarter and that's it. You'll be fine at tax filing time. If you expect to recieve more than $100,000 gross household income from all sources, then send the IRS 25% of your gross business earnings each quarter.

If you want, you can work the numbers through the worksheet if you desire. But you'll find that what you will be paying each quarter will be between 19% and 23% of the gross business income for that quarter. So that's why I don't waste my time with worksheets.  I'm always within the threshhold to not have to pay any penalties for underpayment of quarterly taxes. Here's the rules on that.

If at tax filing time, you owe the IRS less than $1000 *or* less than 10% of your total tax liability for the year (whichever is *HIGHER*) then no underpayment penalties are assessed.

Sweet, simple, to the point.

 

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