W4 Form

[newsong2450]

Hi,

I want to make sure I am getting my hubby and I get our taxes right as we have owed the last 2 years. I have had the same job for 7 years (hubby and I have been married for 2 years) as well as a 2nd part time job. My hubby just got a new job where he would be an independent contractor (1099). He also has another job with the normal w4 form. My question is how do we do fill out the w4 forms for the jobs when the highest paying job is the one one with the 1099?

[rjs]

You can use the Tax Withholding Estimator on the IRS web site to figure out what you should each put on the W-4 forms that you give to your employers.

Tax Withholding Estimator

[newsong2450]

On the form it says to do the w4 multiple jobs thing on the w4 for highest paying job only. What do I do if the highest paying job requires a 1099? How do you enter that into the calculator?

[VolvoGirl]

For 1099Misc you will pay self employment tax on that in addition to regular income tax.  You should probably send in quarterly estimated payments to cover the extra tax.

For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

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, (if you can't get back into your return try this, On the Tax Timeline page you have to select Add A State to get back into your return). But be careful not to change anything on your real return.

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 (Self Employed/H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button

Or here are the blank Estimates and instructions from the IRS…..
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

The 1040ES quarterly estimates are due April 15, 2020, June 15, Sept 15 and Jan 15, 2021. The first 2 quarters are not due until July 15 this year. Your state will also have their own estimate forms. You mail in the estimates with a check or you can do it electronically at the IRS and maybe your state.

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.....2020 Estimate

[rjs]

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@newsong2450 wrote:

On the form it says to do the w4 multiple jobs thing on the w4 for highest paying job only. What do I do if the highest paying job requires a 1099? How do you enter that into the calculator?

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Don't use the instructions and worksheets on the form. Use the Tax Withholding Estimator on the IRS web site. It will tell you what to put on your W-4 forms. (The first page of the W-4 form is all that you give to your employer.) The Tax Withholding Estimator has a place to enter self-employment income.

You can cover your tax for the year with a combination of withholding and quarterly estimated tax payments. Since the self-employment is your largest source of income, you might prefer to make estimated tax payments instead of trying to have enough tax withheld from your W-2 jobs to cover the self-employment income. VolvoGirl has given you more details about making estimated tax payments. In the Tax Withholding Estimator, under Other Sources of Income and Tax Payment, you can enter your self-employment income and the amount of estimated tax that you have paid or plan to pay.

[VolvoGirl]

One tip  I forgot to add is if you use your 2019 return to estimate....

If you didn't owe or missed making the prior quarterly estimated payments and need to just calculate starting now, you can go though the Estimated Taxes section and just put $1 (one dollar) in for the quarters you missed. Then it will only figure the current and remaining quarters.