Uber quarterly estimated income taxes

[K15]

I started driving as as driver using Uber and Lyft platforms. I make approximately around $300 per week. Do I need to file for quarterly estimated income taxes or do I pay taxes at the end of year with you guys along with my other day job? If I have to do the quarterly estimated income taxes, how do I do it with Turbotax? How do I pay my taxes "as I go" for the income I gain from Uber and Lyft?

[ChristinaS · Accepted solution]

You don't need to remit quarterly payments if your other withholding can cover this liability. If you make $300 per week after expenses, that's in the ballpark of $15,000 in net income per year. You must cover the regular tax rate on that income, plus Self-Employment tax. The SE tax would be about $2100 on $15,000 in net income. If your income tax rate is 15%, you can add another $2250 to that. Your tax return can also be impacted by an increase in income, which can reduce certain credits and deductions.

So, does your current withholding cover an additional c $4350 in tax liability? If your refunds are usually low, not paying estimated taxes can cause you to pay a penalty and owe a big chunk when you file. 

You don't absolutely have to make the estimated payments. You can see how it goes and prepare to pay when you file. Its just a good idea to make some changes to pay in a little more during the year.

I would recommend that you at least lower your day job's W4 exemptions or add an additional amount per paycheck. For instance, if you are claiming Single 1, change to Single 0 so they can take out more. If claiming 0, maybe add $50 per paycheck. Or do both.

[ChristinaS]

You can generate vouchers to pay the IRS here:
Federal Taxes- Other Tax Situations- Other Tax Forms- Form W-4 and Estimated Taxes
This simply generates vouchers to mail payments. You can also just pay the IRS online with amounts you estimate on your own-
<a rel="nofollow" target="_blank" href="https://www.irs.gov/payments">https://www.irs.gov/payments</a>
You can't actually pay the estimated taxes through Turbo Tax.

[K15]

Thanks for the answers.. Christina S., I have a day job (unrelated to my work on Uber and Lyft), you're saying for me to change my claiming status in my day job and that would cover what I make in Uber and Lyft responsibilities?

I guess my questions is does it matter how I pay taxes, if I cover my responsibilities of taxes on both jobs?

Could I just pay IRS directly form the link mentioned above? If yes, how would I categorize it? or do i need to categorize it at all? Also how often do I pay IRS using the link. I get paid from Uber and Lyft on weekly basis.

Sorry don't know how things work on this aspect!

[K15]

Sorry, one more thing.. Do I deduct my expenses (ie: gas, car fixtures, cell phone expenses, etc) from the $300 per week before calculating the "15% or whatever the tax percentage is" before paying IRS my taxes directly?

[ChristinaS]

It doesn't matter how you pay it. Uber is on your 1040 just like your W2. If its easier to just have your day job take out more federal and state tax, do that. Yes, you can pay the IRS online anytime you want. Estimated taxes don't need to be overly formal. If you get some cash and want to pay, just do it. You can do it 4 times a year, 20 times, or 1 time.

[ChristinaS]

With IRS Direct Pay, you select reason "estimated tax"..

[K15]

Thank you, Christina. I see the next drop down is "Apply payment to: 1040ES(for 1040, 1040A, 1040EZ)" is that correct? Also how often do I need to pay them? and would I pay them after deducting my expenses from the weekly $300?

[ChristinaS]

Yes..apply to 1040ES. You can pay whenever you want. Or just change your job withholding.. or do a little of both. Payments are applied in quarters, but you can pay 100 times a year if you wanted to. Pls use calculation in my original response to reflect projected net income after expenses. So, if 300 doesn't include expenses, you'll want to guesstimate expenses too.. or you may overpay these estimates.

[K15]

Thank you for taking the time and answer my questions, Christina. You're the best!!! 🙂

[ChristinaS]

Oh, shucks... thanks! And good like with Uber and Lyft!

[ChristinaS]

aka "good luck" (typo there, ha ha)