Hi,
Here is some background on my current situation: I am a college student and US Citizen (single filer, claimed as dependent by parents), and I worked this past summer as an intern for a Canadian-based company as an independent contractor (I worked from the US). I was paid by wire transfer, did not receive any tax forms from the company, and did not have any money withholded as the company is not located in the US. Therefore, I have to use my own invoices and records to file my taxes (self employment).
Since this was my first time working for a non-US firm (only for 3 months), I was unaware that I had to estimate tax payments. Therefore, I am thinking that I have to deal with Form 2210. Is this correct? I interned for 3 months at a US based company the year prior, so I am wondering how this will impact my form 2210 (I did not work for the Canadian company 2 years in a row).
Any help would be appreciated. Thanks.
Right, but I am just trying to understand the rationale behind the decisions TurboTax makes.
As a US Citizen you are taxed on all worldwide income. For self-employment income, there is ordinary income tax plus Self-Employment taxes on net profit. If you owe taxes (bottom line with all worldwide income combined, and after deductions and credits) , then you maybe subject to an underpayment penalty. If so, then yes, Form 2210 comes into play to calculate whether or not you will owe an underpayment penalty.
As NCperson says, the software will walk you through it. Make sure to read any blue text links on the screens as they can help to answer questions you have about your entries.