Trying to Pay Estimated Taxes for 2024

[tjm-oregon-taxes]

In 2023 I was employed as a FTE (on a W2) and had taxes withheld normally.

In 2024, I am employed as a FTE (W2) **and** I am self-employed on a 1099 for 6 months of the year (starting June). 

I know I will need to pay self-employment taxes in 2024 and I'm having challenges estimating them. Here's are the questions I'm hoping for answers to:

• Can I use TurboTax 2023 to estimate my 2024 self-employment taxes? (Keep in mind I didn't have self-employment income in 2023.) If so, how?
  • I did locate this article but the instructions fall flat on #1. (Search takes me to the TurboTax Assistant (AI); it does not retrieve the form or offer a "jump to" option.) Can TurboTax calculate next year's federal estimated taxes? (intuit.com)
• Can anyone direct me to help in completing 1040-ES? I downloaded the full packet but on p. 8, 2024 Estimated Tax Worksheet, it asks for AGI expected in 2024 (see instructions) and but it doesn't say which instructions and how to estimate AGI. 

Appreciate any help from the community. Thank you. 

[rjs]

You can't be "self-employed on a W2." If you are self-employed you do not get a W-2. If you get a W-2, you are not self-employed. You need to clarify your business or employee relationship with whoever you are working for.

[VolvoGirl]

For the self employment job they may give you a 1099NEC (not a W2) if they pay you $600 or more for the year.

When you get paid with a 1099NEC or no form you are a self employed independent contractor. You will file a Schedule C in your personal 1040 return.

Some general info on self employment on Schedule C.......

You will need to keep good records. You may get a 1099NEC or 1099K at the end of the year if someone pays you more than $600 but you need to report all your income no matter how small. You might want to use Quicken or QuickBooks to keep track of your income and expenses.

When you are self employed you are in business for yourself and the person or company that pays you is your customer or client.

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax. You will need to use the Online Premium version or any Desktop program but the Desktop Home & Business version will have the most help.

Turbo Tax Beginners Tax Guide for the Self Employed
https://turbotax.intuit.com/tax-tips/self-employment-taxes/beginners-tax-guide-for-the-self-employed...

Here is some IRS reading material……
IRS information on Self Employment
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

Publication 334, Tax Guide for Small Business
https://www.irs.gov/pub/irs-pdf/p334.pdf

Publication 535 Business Expenses
https://www.irs.gov/pub/irs-pdf/p535.pdf

You pay Self Employment tax on $400 or more of net profit from self-employment in addition to any regular income tax. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.

You may need to send in quarterly estimated payments. You must make quarterly estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

[rjs]

What exactly do you mean by FTE? FTE usually stands for Full-Time Equivalent. It's a measurement that is used to quantify headcount in a company. It does not refer to one particular employee. An FTE is not a person.

If you're  a regular employee who gets a paycheck with tax withheld and gets a W-2 at the end of the year, then you're an employee, not an FTE.

[tjm-oregon-taxes]

@rjs Noted. I corrected my post above. I am being paid by business #1 on a W2 and business #2 on a 1099. Apologies for the typo. 

[tjm-oregon-taxes]

@rjs 

I used FTE as short-hand for employee, which is how it's used at all my past employers. That said, I understand that if I'm asking for advice, I should be specific. Also, I corrected my post above.

In 2024, I am earning income both on a W2 (from business #1) and on a 1099 (from business #2).

When I filed my 2023 taxes in January/February, I did not estimate tax payments for 2024 because I had no idea then I'd be earning income on a 1099 in 2024.

So, my question is: Can I use TurboTax Deluxe 2023 to estimate my 2024 self-employment tax payments, given that I've long-since filed? The help guide indicates "yes" but the help guide also doesn't work. 

[tjm-oregon-taxes]

@VolvoGirl 

Thank you for the volume of information. I know about 80% of this and it doesn't answer my question which is:

- Can I use TurboTax 2023 (when I've long-since filed, and did not opt to estimate tax payments for 2024 at the time because in February I had no idea I'd be on a 1099) to estimate my 2024 tax payments and complete 1040-ES?

[rjs]

@tjm-oregon-taxes  When you filed your 2023 tax return did you use TurboTax Online or the CD/Download TurboTax software?

[dlipps]

I am in the exact same situation, so I'm interested to know if/when you hear of a way to estimate. 

[VolvoGirl]

Turbo Tax guide to Estimated taxes

A Guide to Paying Quarterly Taxes - TurboTax Tax Tips & Videos

You must make quarterly estimated tax payments for the current tax year if both of the following apply:

- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:

    90% of the tax to be shown on your current year’s tax return, or

  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).

To prepare estimates for next year you start with your current return, but be careful not to change anything.  For Online returns, if you can't get back into your return, Click on Add a State to let you back into your retun.

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

Or Go to….

Federal Taxes or Personal (Desktop H&B)

Other Tax Situations

Other Tax Forms

Form W-4 and Estimated Taxes - Click the Start or Update button

The 1040ES quarterly estimates are due April 15, June 17, Sept 16 and Jan 15, 2025.  Your state will also have their own estimate forms.

Or you can pay directly on the IRS website https://www.irs.gov/payments

Be sure to pick the right kind of payment and year.....2024 Estimate

[VolvoGirl]

To plan for next year.   In both the Online and Desktop program  you can go through the Estimate section as i posted above or in the Desktop program there is also a What-If worksheet.   

To plan for next year in the Online version you can go though the Estimate section. Click on Add A State to let you back into your return, Be very careful not to change any of your actual current return. Or you can set up another account to test in. You don't have to pay unless you want to print it out. You can use the same email address for 5 accounts.

If you have the Desktop program you can do another test return, go up to File-New or save your return with another name to test in, go to File-Save As.

In Desktop there is also a What-If worksheet. 

Go to Forms Mode, click Forms in the upper right or on the left for Mac. Then click Open Forms box in the top of the column on the left. Open the US listing of forms and towards the bottom find the What-if worksheet. It's right under Estimated Taxes.

Or try…Go into Forms View. Once there, at the top of the left column, click on the icon for "Open Form". A popup window will appear. In the text line, type the word "what" without quotes. You should see "what-if worksheet" appear as a selection choice. Double-click it to launch the form.