Estimated Quarterly Taxes

[Kmruda]

Hello, I am currently an Indiana resident working for a church as a volunteer who is receiving monthly stipend compensation over two years for participating in a leadership development program. The total amount of funds received at the end of the year comes out to 18,000 roughly and as a  result I receive a 1099-NEC for tax purposes. The only other income I receive is from another part time job where I make less than 40 dollars once a month, not really enough to affect my over all taxes. For that job I receive a W2 back at the end of the year. When I filed my taxes for the previous year I found out that I should have been making quarterly estimated payments for state and federal throughout the year instead of a one time payment. I was charged a penalty fee and I am hoping to avoid these fees this year. How much should one be putting back as a 1099-NEC worker if that is their main source of income? How does making quarterly payments work? How do I know how much to save per estimated payment? 

[RobertB4444]

First, did you have any expenses that you incurred as a volunteer at the church?  Any equipment that you had to buy, books that you purchased, travel that you had to pay for?  If so you should be deducting any of those expenses from the $18,000 in order to reduce your tax bill.

Second, self employment tax on the money that you have earned is 15%.  You need to be sending in at least 15% of what you're being paid each month (minus any expenses) to cover that.  If that is all the income that you make for the year then 15% comes pretty close to taking care of the tax bill.

@Kmruda