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I am employed (W-2), my husband is a rideshare driver (1099). To file jointly, can/should he file the quarterly and then we file together end of year? How does it work?

 
4 Replies
VolvoGirl
Level 15

I am employed (W-2), my husband is a rideshare driver (1099). To file jointly, can/should he file the quarterly and then we file together end of year? How does it work?

He doesn't file quarterly.  He can make quarterly estimated payments to cover the self employment tax on your joint return at the end of the year.

 

Some general info on self employment...........

You will need to keep good records.  You may get a 1099Misc at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small.  You might want to use Quicken or QuickBooks to keep track of your income and expenses.

 

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

 

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

 

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.  You will need to use the Online Self Employed version or any Desktop program but the Desktop Home & Business version will have the most help.

 

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% 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 Schedule 1 line 27.  The SE tax is already included in your tax due or reduced your refund.  It is on the Schedule 4 line 57.  The SE tax is in addition to your regular income tax on the net profit.

 

Here is some IRS 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

 

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...

 

How to get the Lyft discount

https://ttlc.intuit.com/community/account-management/help/why-isn-t-my-lyft-discount-being-applied-t...

 

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.)

 

Here are the blank Estimates and instructions…..

http://www.irs.gov/pub/irs-pdf/f1040es.pdf

 

The 1040ES quarterly estimates are due April 15, 2019, June 17, Sept 16 and Jan 15, 2020.  Your state will also have their own estimate forms.

 

Or you can pay directly on the IRS website https://www.irs.gov/payments

Be sure to pick the right kind of payment and year.....2019 Estimate

 

 

 

VolvoGirl
Level 15

I am employed (W-2), my husband is a rideshare driver (1099). To file jointly, can/should he file the quarterly and then we file together end of year? How does it work?

Oh, I thought you said for Lyft.  Or is it for Uber?  I have other links for Uber.

Carl
Level 15

I am employed (W-2), my husband is a rideshare driver (1099). To file jointly, can/should he file the quarterly and then we file together end of year? How does it work?

Basically in a nutshell, when self employed (as your husband is) you don't "FILE" anything quarterly. You "PAY' estimated taxes quarterly. Then you *file* your annual tax return (joint in your case) annually as you always have.

A good rule of thumb is to send the IRS *AT LEAST* 20% of your *gross* business income each quarter. Then come tax filing time you'll be fine.

Now if your state also taxes personal income, then you'll need to pay quarterly taxes to your state completely separate from your federal quarterly payments. If you send your state a percentage of the business income that is equal to your state's tax rate, then you'll be fine with state taxes at tax filing time too.

Anonymous
Not applicable

I am employed (W-2), my husband is a rideshare driver (1099). To file jointly, can/should he file the quarterly and then we file together end of year? How does it work?

your husbands's income results in two types of taxes reported on the joint return.   additional income taxes on the income and self-employment taxes.   estimated taxes need to be paid for both types unless your withholding will cover his taxes.   you might want to use Turbo tax's taxcaster to estimate your combines taxes for 2019

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

25% of estimated taxes for 2019 were due on each of these dates - 4/15/19, 6/15/19 and 9/15/19  with the final installment due 1/15/2020 .  so if you use taxcaster, 75% of the estimated amount owed were due on or before 9/15.

 

when using taxcaster use estimated full year amounts.  

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