- Asked by Daboa
On your tax return you fill out schedule C for self empoyment income from the 1099s and your own records.
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% (13.3% for 2011) 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.)
Federal Taxes or Personal (H&B version)
Other Tax Situations
Other Tax Forms
Form W-4 and Estimated Taxes - Click the Start or Update button
But, just right off the bat: two reassuring facts: if you have a balance due of under $1000, there is no late payment charge (if youpay the balance due by April 15.
Also, you are not penalized for not forecasting your future income. If you had no income during the first three quarters and then a bunch in quarter four there would be no late payment charge from not having paid in for the first 3 quarters so long as you paid at least 90% of your taxes by January 15th. (But taking advantage of this does involve doing a sort of complicated form timing your income by quarter).
You probably need to make an estimated payment by January 15th and you should be fine. But don't forget that you owe self employment tax on the independent contractor income, in addition to income tax.
- In 2012, I worked as an Independent Contractor from 9/20/12 to 11/30/12. I never paid estimated taxes or Self Employment taxes.
- How do I pay estimated taxes for income that I'm done earning?
- The 1040-ES keeps talking about expected income. I already earned the income. Do I fill out this form as if were filling it out before 2012 and were expected to make what I actually did?
- How do I pay any of this on TurboTax? When I go to W-4 and Estimated Taxes, it says "Based on the information you've already entered, you do not need to make estimated tax payments in 2013." But I'm trying to pay for 2012. It won't even ask me about self-employment earnings for 2012.
- Is Self-Employment tax separate from the quarterly Estimated Tax? Does Self-Employment tax also have to be paid by January 15 or does it go with my federal taxes by April 15?
- I do not have a 1099-MISC from my contractual employer yet, so I do not have that for reference. All I have is my own records of how much I earned (about $8,000) and I'm trying to pay what I need to pay when I need to pay it.
Estimated taxes are like your withholding from paychecks. They are to cover the self employment tax (and actually any tax you have). The self employment tax is calculated on your 1040 return with the rest of your income and regular income tax.
Here's how to enter the self empoyment. Go ahead and enter everything and if you have a tax due of more than $1,000 you might want to send in the 4th quarter estimate that's due Jan 15. (See my link above to get the blank ES forms for 2012).
You need to report all your income even if you don't get a 1099Misc. You use your own records. You are considered self employed and have to fill out a schedule C for business income. Enter it under…..
Federal Taxes Tab
Wages & Income
Choose Explore on my own (if it comes up)
Then scroll way down to Business Items
Business Income and Expenses - Click the Start or Update button
You use your own name and ssn or business name and EIN if you have one. You should say you use the Cash Accounting Method and all income is at risk. After you put in your income and expenses if your net profit is $400 or more you will pay 13.3% for 2012 Self Employment tax in addition to your regular income tax. The Schedule SE will be automatically filled out for it.
After it asks if you received any 1099Misc it will ask if you had any income not reported on a 1099Misc. You should be keeping your own records. Just go through the interview and answer the questions. Then you will enter your expenses.
Question: Does that $1,014 include both income and self employment tax? If so, are these taxes due on January 15 or are they not due until April 15? Because I'm also waiting on some W2's, I'd prefer to file everything that's due on April 15th together. Right now I'd only like to process what's due on January 15.
If I do want to send in my 4th quarter estimates, I'm still not clear on how to do that. Can I do this through TurboTax?
You said to "See my link above to get the blank ES forms for 2012," but before that you said, "Don't use the estimated taxes in 2012. As you found out those are to prepare ones for 2013 year. " Hence my confusion.
Do I have to pay Estimated Taxes (quarterly), Self-employment taxes (what I just calculated), and Income tax (my remaining W2's)?
Again, sorry if I'm slow. Thanks so much.
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