Hi, I just started driving for Uber part time, if my regular job's withheld taxes reach the income tax I paid last year, do I need to pay estimated taxes? Thank you Rob

[VolvoGirl · Accepted solution]

Tax Tips for Uber, Lyft, Sidecar and other Car Sharing Drivers FAQ
 https://turbotax.intuit.com/tax-tools/tax-tips/Self-Employment-Taxes/Tax-Tips-for-Uber--Lyft--Sideca...

You will need to file a schedule C in your personal tax return for self employment income.  You will need to use the Self Employed Online version to fill out schedule C.

Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Pulication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf

Self Employment tax (Scheduled SE) is generated if a person has $400 or more of net profit from self-employment on Schedule C.  You pay 15.3% for SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....
http://quickbooks.intuit.com/self-employed


PAYING QUARTERLY ESTIMATES
The first year you don't need to pay estimates as long as you pay in (by withholding) as much as your tax was last year.  But if you will have a big income you should send in estimates so you don't owe too much next April on your tax return.

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
 
- 2. You expect your withholding and credits to be less than the smaller of:
    90% of the tax to be shown on your current year’s tax return, or
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

To prepare estimates for next year you start with your current return, be careful not to change anything.  If you can't get back into your return, Try this, you can sign back onto your account, click the Visit My Tax Timeline and then under SOME THINGS YOU CAN DO, click on Add a State.  This should get you back into your return.

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

OR Go to….
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

The 1040ES quarterly estimates for 2017 are due April 18, June 15, Sept 15 and Jan 16, 2018.  Your state will also have their own estimate forms.  You mail in the estimates with a check or you can do it electronically at the IRS and maybe your state.

To just estimate the remaining quarters put in that you paid $1 for the quarters you missed so it will only calculate the remaining quarters.

[SweetieJean]

State requirements may be different.

[rrathbun1]

Thank you!

[DazedAndConfused]

Just a note from personal experience. If all you do is drive part-time as a gig driver, you're probably not going to owe $1,000 or more in self-employment taxes, especially if you deduct your mileage and expenses, which, surprisingly, most gig drivers don't bother with until it comes back to bite them on the keyster. QuickBooks SE was recommending all these quarterly payments to be remitted, yet for the entire year they projected I'd pay no more than $600 or so in taxes. In that case, if you paid NO TAX the prior tax year, you don't have to file or pay quarterly estimated taxes. If you went ahead and made quarterly $125 payments, you'd just end up getting all that money back in a tax refund, because you're below the poverty line.

This doesn't apply if you expect to pay $1,000 or more in taxes. Then you definitely have to remit quarterly. This is something QBSE will suggest no matter what, because they have no way of knowing what other forms of income you have or any at all (if you're not entering it on their site). If you have a mix of W2 and 1099 income, and you're above the poverty line, enter it all in QBSE and remit to the IRS what they suggest. Worst case is you pay too much and then get some of it back in the form of a refund. Best case and your hiney is covered.

Because of the pandemic, I've been put in this position of not generating much gig pay, because with 40 million people unemployed, a great number of them have become gig drivers, making it nearly impossible for most drivers to  make a living. Read the IRS website on this topic, as they have documents that make it crystal clear whether you should pay or not pay estimated taxes. 

The QBSE mileage tracker has turned into pure junk. Find a good alternative and track your mileage religiously. It will save you money, plus make the IRS happy in the unlikely event you're audited.