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ratsat
New Member

I already have additional tax taken from my retirement account. Do I need to also file estimated tax on my part-time self employment?

 
2 Replies
Sunny_Tax_Expert
Employee Tax Expert

I already have additional tax taken from my retirement account. Do I need to also file estimated tax on my part-time self employment?

Hi @ratsat,

 

It's good practice to have tax withheld or paid from all income streams.  With regards to the self employment income perhaps the IRS says it best:

"As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly. Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording "self-employment tax" is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax)."

 

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OpeA1
Employee Tax Expert

I already have additional tax taken from my retirement account. Do I need to also file estimated tax on my part-time self employment?

Yes, you do according IRS rules: https://www.irs.gov/faqs/estimated-tax  

 

 

Answer:

For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you don't pay enough tax by the due date of each payment period, you may be charged a penalty even if you're due a refund when you file your income tax return at the end of the year.

If you mail your estimated tax payment and the date of the U.S. postmark is on or before the due date, the IRS will generally consider the payment to be on time. If you use IRS Direct Pay, you can make payments up to 8 p.m. Eastern time on the due date. If you use a credit or a debit card, you can make payments up to midnight on the due date.

 

 

 

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