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nh33taxquestions
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Will W4 withold cover side gig quarterly estimated taxes?

Will the taxes I withhold in my W4 regular job's paycheck be applied to the taxes I owe in my side gig's quarterly estimated taxes? If YES and the witholding amount covers the taxes I would owe for my side gig, then do I not have to pay quarterly estimated taxes?

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4 Replies

Will W4 withold cover side gig quarterly estimated taxes?

Will the taxes I withhold in my W4 regular job's paycheck be applied to the taxes I owe in my side gig's quarterly estimated taxes?  Yes it does. 

 

If YES and the witholding amount covers the taxes I would owe for my side gig, then do I not have to pay quarterly estimated taxes?  Correct ... estimates will not be needed. 

Will W4 withold cover side gig quarterly estimated taxes?

So you might want to reduce the number of allowances on the W4 to increase the withholding to cover your self employment tax.  

 

Are you new to self employment?

Here is some general info.  You will need to keep good records.  You may get a 1099Misc 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 tract of your income and expenses.

 

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Online Self Employed  return....

http://quickbooks.intuit.com/self-employed

 

To report your self employment income you will fill out schedule C in your personal 1040 tax return and pay SE self employment Tax.

 

Here is some IRS reading material……

 

IRS information on Self Employment

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

 

Pulication 334, Tax Guide for Small Business

http://www.irs.gov/pub/irs-pdf/p334.pdf

 

Publication 535 Business Expenses

http://www.irs.gov/pub/irs-pdf/p535.pdf

 

 

 

Anonymous
Not applicable

Will W4 withold cover side gig quarterly estimated taxes?

it seems as far as your side gig, you are self-employed and will need to file schedule C for 2019.  (if you're in business with another person on this side gig,   a partnership return would probably be required - consult a pro)

 

any way.  as to your side gig income. not only will you owe income taxes but also self-employment taxes which work out to be about 14.13% of your net se income.   

 

even if you do not have enough withheld to cover your 100% of your 2019 taxes there are exceptions to the under payment of estimated tax penalty

 

1) withholding is 90% or more of current year (2019) tax

2)  withholding is 100% or more ( some cases 110%)  of 2018 tax  

3) balance due after subtracting withholding from 2019 tax is less than $1,000

 

if there is an underpayment penalty, if this is the first time you've incurred  it,   you can ask the IRS to abate it.  Usually the IRS will do this for first time offenders, but it is up to them

rjs
Level 15
Level 15

Will W4 withold cover side gig quarterly estimated taxes?

You can use the IRS Tax Withholding Estimator to figure out what to put on your W-4 form to make sure you have enough withheld to cover the side gig.

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