I recently filed my 2021 tax return using TurboTax home and business (pc edition). I started a sole proprietorship in late 2021, and am now looking to file my quarterly tax payment (self-employment tax + income tax) for Q1 of 2022. I understand I can pay through eftps.gov. However, I need to calculate how much to pay (using form 1040-ES I believe).
Can my 2021 TurboTax program calculate how much my quarterly payment should be? I could just try to guess it by multiplying my expected income times my combined marginal tax rate and the self-employment tax rate. But I was hoping to use software that could give me a more precise figure (accounting for QBI deduction, etc.). Do I have to buy another TurboTax product? Thanks!
See this TurboTax support FAQ for estimating the 2022 taxes - https://ttlc.intuit.com/community/tax-payments/help/can-turbotax-calculate-next-year-s-federal-estimated-taxes/00/26437
Thanks @DoninGA - I followed your advice and was able to calculate my quarterly payments for 2022. My follow-up question is, I'm operating a sole proprietorship and filing quarterly taxes for the first time. Using the method you described TurboTax calculated my expected tax liability (that I can divide by 4, and submit for my quarterly payments). My question is: Is the amount TurboTax estimates I will owe just federal income tax, or does it include the 15.3% federal self-employment tax (i.e., social security and Medicare)?
Thanks!
@messner8000 That amount of estimated taxes is based on what you entered for all income you estimate to be receiving in 2022.
Sorry, @doninGA I don't understand. I understand the tax total is based on all the income I entered. My question is whether the tax liability is just income tax liability, or if it includes self-employment tax (SS and Medicare) liability.
To take a way over-simplified example (ignoring deductions, etc., but just to make my question clearer), let's say I enter $100,000 in income, and it will all be taxed at 22% income tax bracket, plus there's the 15.3% self-employment tax. Would TurboTax say my tax liability is $22,000 (.22 x 100,000) or $37,300 ($22,000 + .153x100,000)? I assume my quarterly payments need to include self-employment tax, so I want to make sure TurboTax is including that in its tax estimate.
Thanks!