Originally Posted by sp44
So I workd in 2013 with both 1099 and W2.
As a 1099 I made $10500
As a W2 I made $29500
At the end it said I owed roughly $2,000.
I then decided to do each my 1099 and W2 separately. When I did my 1099 by itself it said I owed roughly $1400. When I did my W2 separately withouth my 1099, it said I get a refund of roughly $1300.
Why is it that when I entered both of them in TurboTax that it says I owe $2000? When doing them separately shows that they would pretty much cancel each other out?
I dont know much about this, so I figure their is logical explanation - that may still be over my head, but still.. would love to know.
Thanks for the help
You owed roughly $1.4k on your 1099 income since you didn’t pay enough quarterly estimated taxes on the income while you get a refund if roughly $1.3K sine your ER withheld more that your tax liability on 1040.Then, eve if you are ultimately subject to tax refund, you are still liable for taxes/interest for not paying enough quarterly estimated taxes; The IRS will charge daily interest on any taxes not paid on time, at an interest rate that is determined quarterly by the IRS. This interest rate is between 5-8% on an annual basis, and is only applied to the amount of underpayment. Suppose you estimated that you would owe $2K in income taxes for the 3rd quarter of this year. But, when you filed your actual taxes, it turns out you owed $3K in taxes for the quarter. Let’s assume the interest rate was 6% for the third quarter. One quarter of interest on the amount you owe ,$1K would be about $15.