Self Employment Taxes

[pynkrosegrl]

I made quarterly estimated payments in 2021 for my work as an independent contractor. I entered the information under Deductions & Credits. Am I supposed to receive a 1099 form? Do I need to report the money earned under Wages & Income as well? I have not received any 1099 forms. When I enter the total payments I received from my contracting work, it says I owe taxes. How is this possible even though I made quarterly estimated payments?

[MaryK4]

You will want to enter the estimated payments you made in the Deductions & Credits section (see below),  Once you make the entries, they will be applied to the overall tax due, including the Self-Employment income.  

[pynkrosegrl]

Thank you for your answer. I entered the estimated tax payments ($3,289.50 total), and then I entered my self-employment income ($21,500 total). This made my expected federal refund decrease by $7000 and my state refund now says I owe money. I’m a bit confused on these significant changes. 

[ThomasM125]

The federal tax on your self-employment income would be your marginal federal tax rate, which could be anywhere from 0 to 37%, plus your self-employment tax rate of about 15%, so your tax on the self-employment income could be more than the estimated tax you paid in. That could decrease your refund.

Also, some credits, such as the earned income credit, are sensitive to changes in your income, so that could be a factor as well. I suggest you review your form 1040 before the additional income is entered, and then view it afterword and that will help you determine what changed.

This is how you can view your form 1040 while working in the online version of TurboTax:

While working on your return in the Federal section of TurboTax: 

   1.  Choose the Tax Tools icon on our left menu bar

   2.  Tools

   3.  View Tax Summary

   4.  Choose the Preview my 1040 on your left menu bar