Quarterly tax payments for self-employment income?

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mc510
Posts: 27
Joined: Tue Oct 25, 2011 1:47 pm

Quarterly tax payments for self-employment income?

Post by mc510 » Fri Sep 14, 2018 11:03 am

Hi all, I hope this is a simple enough question that it can be easily answered. My wife works, I do not, we file as Married Filing Jointly, we do not pre-pay quarterly (which has worked fine for us so far). I have a little bit of self-employment income this year; it's more than $400 so I do need to report it. It's not so much that it's going to significantly change our year-end income tax bill, so my understanding is that I'm not required to make any quarterly IRS payments on my self-employment income. In other words, the question of quarterly or not-quarterly has to do only with whether or not we will have prepaid enough on our Married Filing Jointly return to avoid penalty ... no specific requirement tied to my small amount of self employment income. Is that correct?

Thesaints
Posts: 1592
Joined: Tue Jun 20, 2017 12:25 am

Re: Quarterly tax payments for self-employment income?

Post by Thesaints » Fri Sep 14, 2018 11:10 am

Yes. If on April 15 you end up owing more than $500 (iirc) and did not prepay at least as much as your total tax bill of the previous year (for most), you’ll owe a penalty as well.

This year I would exercise special attention. The tax cut likely lowered your wife withholdings, so that you may not satisfy the “100% of previous year” condition.
Yet, it seems you are talking about small amounts, so you are probably fine.

mc510
Posts: 27
Joined: Tue Oct 25, 2011 1:47 pm

Re: Quarterly tax payments for self-employment income?

Post by mc510 » Fri Sep 14, 2018 11:19 am

Thanks; that's what I thought but good to have it confirmed.

Thanks also for the reminder about my wife's possibly lower withholding due to tax cut, I forgot about that and will have to check it out!

kaneohe
Posts: 4950
Joined: Mon Sep 22, 2008 12:38 pm

Re: Quarterly tax payments for self-employment income?

Post by kaneohe » Fri Sep 14, 2018 11:39 am

mc510 wrote:
Fri Sep 14, 2018 11:03 am
.............................. I have a little bit of self-employment income this year; it's more than $400 so I do need to report it. .....................................
from IRS ....... https://www.irs.gov/newsroom/reporting- ... ous-income
sounds like all income is taxable.......the $400 threshold is for reporting on Sch SE to determine the SE tax (like SS/medicare tax) , not the income tax itself.


"Self-Employment Income

It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.

All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.

Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income.

Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer."

Vanguard Fan 1367
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Joined: Wed Feb 08, 2017 3:09 pm

Re: Quarterly tax payments for self-employment income?

Post by Vanguard Fan 1367 » Fri Sep 14, 2018 1:27 pm

It is pretty easy to go to irs.gov and download and print 1040ES forms. If you think you owe some tax you do have the option of paying that tax with that form. I don't find the IRS penalties to be too oppressive on the 1040ES, I know someone who just waits till she files her 1040 and pays the penalty. It sounds like you aren't talking about a whole lot of money and the "she" that I know doesn't owe a whole lot of money either.

Thesaints
Posts: 1592
Joined: Tue Jun 20, 2017 12:25 am

Re: Quarterly tax payments for self-employment income?

Post by Thesaints » Fri Sep 14, 2018 1:47 pm

No need to download forms. ES payments can be done on-line; no log in required.
Also, let's not forget State taxes.

Personally, I do estimated payments not only to avoid penalties, but also to build a buffer refund, which I can convert in Savings Bonds whenever rates are favorable.

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