NEC taxes

Hi @smbran240 !  Thanks for your question.  Whether you'll have to pay quarterly estimated taxes depends on how much other income you'll have for the year and whether you have any taxes withheld on that other income.  Can you give me some additional information on that?

 

Hi,

 If you expect to owe more than $1,000 in federal taxes for the tax year, you may need to make estimated quarterly tax payments using Form 1040-ES, or else face a penalty for underpayment.  This article explains more and talks about the safe harbor (which I have recapped below).  If you will only owe $296 for the 2023 tax year to the IRS, you will not need to make federal estimated payments.  However, keep in mind you are thinking about what you will owe for the 2023 return (completed in 2024), not what you owed for your 2022 return.

 

To determine whether you need to make quarterly estimates, answer these questions:

1. Will you owe less than $1,000 in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this year? If so, you're safe—you don't need to make estimated tax payments.
2. Do you expect your federal income tax withholding to amount to at least 90 percent of the total tax that you will owe for this tax year? If so, then you're in the clear, and you don't need to make estimated tax payments.
3. Do you expect that your income tax withholding will be at least 100 percent of the total tax on your previous year's return? Or, if your adjusted gross income (2022 Form 1040, line 11) on your tax return was over $150,000 ($75,000 if you're married and file separately), do you expect that your income tax withholding will be at least 110 percent of the total tax for the previous year? If so, then you're not required to make estimated tax payments.

If you answered "no" to all of these questions, you must make estimated tax payments using Form 1040-ES. To avoid a penalty, your total tax payments (estimated taxes plus withholding) during the year must satisfy one of the requirements we just covered.

To do a deeper dive on your personal situation, you may wish to reach out to a live tax expert at Intuit (https://turbotax.intuit.com/personal-taxes/online/live/) or provide more specific details in a follow up message.

 

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Best,

Karen