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Level 2
posted Apr 10, 2024 8:10:17 PM

Self Employment tax and Quarterly payments

My wife started working as self employed near the end of 2023. We are trying to figure out the estimated tax payments she should be making to avoid and penalties or large tax bill when the next tax return comes up. 

 

I'm pretty sure that filling out the 'Estimated taxes and Form W4 Worksheet' is what is used to calculate that for me. It seems its calculating our expected income, income tax, deductions, credits, etc for 2024 and estimating the self employment portion as well as the SS/Medicare parts.

 

Am I correct?

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1 Replies
Expert Alumni
Apr 10, 2024 8:28:36 PM

Yes, that is correct. 

You can try to figure your tax bracket and judge payments from that. 

Also, if you pay 100% of the tax of your 2023 tax liability in 2024, you won't have an underpayment penalty. 

Our tax system is pay as you earn, so try to make the quarterly payments, don't wait until the end of the year.