You send in quarterly estimated payments to cover the self employment tax (FICA).
Turbo Tax will calculate the 1040ES estimated payments
You must make quarterly estimated tax payments for the current tax 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).
How to make the Estimated payments
Here are the blank Estimates and instructions…..
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 (If it is 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.
Sorry you will have to manually enter the estimates you pay into Turbo Tax next year. Should be easy to keep track of them. It's only 4 times a year. I'm paying my first one today. It's due April 15. Keep a list of payments in your business files like your expenses. And of course in your tax file.
Do you use a program to track your finances and business income & expenses? I use Quicken.