Estimated taxes for self employed quartley payments

[dmclean222]

Hi, 

On the 1040-ES form, I can use married filing jointly deductions, or the filing separately. 

However, I am self employed and my spouse is employed. 

Therefore, would you use MFJ deductions or filing separately? 

My spouse is asserting I should use the 12,500 deduction as otherwise it may result in me paying less than I actually should? 

Thanks in advance 

[RichBrenOne]

I would still file a joint return for the most deductions 

[dmclean222]

Hi, 

Yes, but the major point is only one of is self employed, so does it make sense? 

[VolvoGirl]

Are you filing Joint or Married filing Separate?  You can file Joint with self employment income.

Don't confuse itemized deductions on schedule A with your business expenses/deductions on schedule C. They are separate. For Schedule A personal deductions, you get to take your itemized deductions or the standard deduction, whichever is larger.  Itemized deductions are things like Medical, Gifts to Charity, State Income Taxes Paid, Mortgage Interest, Property Taxes, Car Registration fees, etc.

For 2021 the standard deduction amounts are:

Single 12,550 + 1,700 for 65 and over or blind (14,250)

HOH 18,800 + 1,700 for 65 and over or blind

Joint 25,100 + 1,350 for each 65 and over or blind

Married filing Separate 12,550 + 1,350 for 65 and over or blind

And may I ask why you are filing separate returns?  Sometimes people don't realize the differences between filing  Joint and MFS.

Unless you have a specific reason to file separate returns,

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction.   And if you are in a Community Property state MFS gets tricky to figure out.  Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns.  And if you are using the Online version that means using 2 accounts and paying the fees twice.  

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong.  If one person itemizes deductions on Schedule A then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!  (Business expenses are not itemized deductions.  Business goes on Schedule C not A.)

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85`% of your Social Security becomes taxable right away even with zero other income.

See …….

https://ttlc.intuit.com/community/married/help/is-it-better-for-a-married-couple-to-file-jointly-or-...

You get to take both,  your business expenses AND the Standard Deduction (or your personal Itemized Deductions).  And you have to enter your business expenses.  Be aware, if you have self employment income you can get in trouble for not reporting all your expenses to qualify for the EIC.

[JohnB5677]

There are two issues. 

• Should you file jointly?  
  • I Agree with RichBrenOne that you should file jointly.
  • In general, that will provide a better allocation of deductions.
• Should you prepare your estimated taxes jointly or separately.
  • If you prepare them jointly it will give you a better indication of where your taxes will be overall, but not your individual obligations.
  • If you do them separately it will give you a better indication of your individual tax status.
• Neither way is wrong.  If you do them separately, I recommend your spouse prepare a W-4 to give to the employer.