Paying Taxes From Being Self-Employed - What Are My Options?

[Tosha]

Hello,

I worked a job last year and also did a lot of freelance work on the side (independent contractor). I'll be getting one W2 and a few 1099-MISC's back for 2017. 

My Question: will I be able to pay back what I owe (self-employed taxes) from the money I'll be getting back with my Federal return or will I have to pay the S.E. taxes separately (after TurboTax calculates what I owe)?

I ask because I'm looking to buy the TurboTax product for Self-Employed individuals and was wondering how it would work with my 1099 situation/how I'm supposed to pay what I owe.   

This is my first time being "self-employed" and having to pay something back. I just want to make sure it's done right/find out how I'm to pay back what I owe. 

Thanks,

Tosha  

[FaithY]

Yes. How it works is you will enter your W-2 and 1099-Misc forms (along with all of the rest of your tax documents) into TurboTax and they will appear on Form 1040. Form 1040 will combine the taxes you owe on line 63 (including self-employment taxes). Then any payments and credit that you made or are eligible for will reduce the amount of your total tax. If you are getting a refund it will appear on line 75, and if you owe tax, it will appear on line 78.

You will also get a deduction for 1/2 of the self employment taxes you pay, and it will appear on Form 1040, Line 27 Deductible part of self-employment tax.

Looking at your 1040 after you have entered all your information will help you understand the calculation. 

You can preview your 1040 by following these steps:

1. Click "Tax Tools" (On the left in black)
2. Click "Tools"
3. Click "View Tax Summary" under "Other helpful links…"
4. Click "Preview my 1040" its on the left in black. 

To create a Schedule C for self-employment in TurboTax:

1. Log on to TurboTax and pick up where you left off.
2. Click the Search box in the right hand corner, search for "Schedule C", and click the first search result "Jump to Schedule C".
3. You will see the "Your self-employed work summary" screen. If you have entered a business into TurboTax already, you will see it listed on this screen. (click on attachment below for a visual aid)
4. Click Add another line of work (to create a new business in TurboTax) or click Edit (if you already added the business into TurboTax)
5. TurboTax will walk you through entering your income and expenses

[FaithY]

This link may also be helpful since this is your first time being self-employed: <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...>

[Tosha]

Thanks so much! Just to make sure I got everything understood from you and everyone else who answered, the TurboTax software will only calculate what I'm expected to owe, correct? Actually paying back what I owe, I'll have to do that on my own whether it's writing out a check to the IRS, etc? I don't know why, but I was under the impression that I could get everything done - calculations and paying for it - with TurboTax.

[fanfare]

To pay your tax due, including SE tax, write a check payable to "US Treasury".
Mail it to your designated IRS address. Print your SSN and "for tax year 20xx" on the check.
Or, visit directpay.irs.gov  to pay online.

[BobinCT]

Or sign up for efts

[Tosha]

I see. So the TurboTax software will only calculate what I'm expected to owe... Actually paying back what I owe, I'll have to do that on my own (write a check/pay online, etc)? Just want to make sure I'm understanding all this, haha. Thanks!