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spryteplay
New Member

Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

This is my first year being self-employed as an independent contractor; started my job Jan. 1, 2017. Worked half year in 2016 with a W-2. Also, wife is W-2 employed and continues to be W-2 employed.

I expect to make around $33-34K this year total and want to make quarterly payments to avoid penalties and interest, but there doesn't seem to be a way to calculate this on the 1040-ES.

Thank you for your responses.

8 Replies
Coleen3
Intuit Alumni

Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

Turbotax will walk the process of estimating your taxes for 2017. Follow the steps below:

You can print next year's estimated tax vouchers (Form 1040-ES) in your 2016 program:

  1. Open your 2016 return in TurboTax.
  2. Search for 1040-es (exact phrase) in your program's search box, located in the upper right corner.
  3. Click the Jump to 1040-es link in the search results.
  4. Answer No to the W-4 withholding question to start the estimated payment calculations interview.
  • You'll be asked a series of questions about your 2017 income. Answer them as best you can.
  • When you get to the Print Vouchers? screen, answer Yes. They'll print with your federal return.
  •  

    spryteplay
    New Member

    Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

    Is this with some paid program? Because these instructions do not work. When I "jump to 1040-ES" I get the page with "Miscellaneous Tax Forms" - there's nothing to work with from there.
    Coleen3
    Intuit Alumni

    Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

    When I enter 1040-ES, select jump to 1040-ES, I get "Adjust How Much Tax You Pay". You should be able to use this on any version.
    spryteplay
    New Member

    Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

    Perhaps I should reiterate that I started self-employment January 2, 2017. I expect to make a certain amount, and I believe I need to make quarterly payments so as to avoid penalty at the end of the year; however, there seems to be no way to do this. Am I even required to make payments if this year (2017) is my first year being self-employed? Do I need to submit my first payment April 15, 2017? Or do I just save my tax, set aside, and pay at the end of the year on 2017 tax return? Will I have to pay a penalty for not paying quarterly?
    Coleen3
    Intuit Alumni

    Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

    Yes, you should make the payments on the assigned dates. The IRS has a pay as you go system. If you were to wait until the end of the year, you may be liable for a penalty, not to speak of a tax liability it would be difficult to pay. The easy way, without too much fuss, is to on March 31, look at your SE income and figure tax at around 25-30% and send it in. Do the same for the earnings from April-June, etc. You are taxed for SE purposes at 15.3% and for federal by whatever tax bracket you fall into.
    spryteplay
    New Member

    Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

    So, how do I fill out the form when the form asks for information from the previous year, which I do not have? Also, I can't seem to be able to open the 1040-ES jump to "Adjust How Much Tax You Pay" (I have filled out my 2016 tax return with 2016 W-2s, etc, but I have not yet filed it)
    Coleen3
    Intuit Alumni

    Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

    You don't need to. That is based on the assumption that you owed in 2016 and you are trying to pay in just enough more to avoid a penalty. Try manually for the ES.  (Federal Tax -> Other Tax Situations -> W-4 and Estimated Tax Payments)
    spryteplay
    New Member

    Started new job 1-2-17 first year self-employed, worked half-year 2016, wife works W-2. How do I estimate payments for this first year to avoid penalties at end of year?

    Would that I could do it manually - I believe my first time through, I had clicked "no" when it asked if I had paid estimated taxes in 2016 (because, I didn't). That returned me to the home page. When I click to "revisit", it just goes back to the home "Other Tax Situations" without allowing me to revisit (not that answering "no" again can do any help).
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