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Old 02-14-2015, 02:44 PM
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W-2 and 1099

I'm a single Ohio resident with no dependents. I use the standard deduction and the $2500 student loan interest deduction. My gross w-2 income is $53,000 from my day job. I also take a $6500 annual distribution from my IRA. I'm planning to do extra subcontractor work with a 1099 potential income up to $20,000 per year. My questions are:

1) Do I have to pay taxes for the 1099 income quarterly or can I pay them annually with everything else? I prefer to pay them annually.

2) If I do have to pay them quarterly, I'm having a hard time figuring out how much do I need to pay? I tried using online calculators but wasn’t not able to figure out my tax bracket and get an accurate answer

3) Also if I have do pay them quarterly, is it possible to withhold enough money from the 1099 to cover this without paying quarterly? Alternatively, if not possible, is it possible to withhold extra from my w-2 to cover both jobs?

Thanks so much for your assistance. I really appreciate your advice!!
Mike



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Old 02-14-2015, 05:46 PM
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Join Date: Oct 2010
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1) Do I have to pay taxes for the 1099 income quarterly or can I pay them annually with everything else? I prefer to pay them annually.==========>>>>>>>>>unless you pay estimated taxes, then you are subject to tax penalty/interest on you tax liability; If you are filing as a sole proprietor and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1k or more when you file your return. You do not have to pay estimated tax for the current year if you had no tax liability for the prior year; You were a U.S. citizen or resident for the whole year; Your prior tax year covered a 12 month period

2) If I do have to pay them quarterly, I'm having a hard time figuring out how much do I need to pay? I tried using online calculators but wasn’t not able to figure out my tax bracket and get an accurate answer======>>>>>>>>>>>no big deal;the easiesy is to pay at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1k in tax after subtracting their withholdings and credits.

3) Also if I have do pay them quarterly, is it possible to withhold enough money from the 1099 to cover this without paying quarterly?===========>>>>>>>>>>>>no;as you can see, the W-2 wages get reported as wages on the front of the 1040. The money you earned directly whether or not a 1099 was issued to you is reported as gross receipts on a Sch C which is the form for sole-proprietors and freelancers. As you’re self-employed or earn additional income that does not withhold federal income taxes (i.e., you receive 1099 forms), you may have to make quarterly estimated tax payments.

Alternatively, if not possible, is it possible to withhold extra from my w-2 to cover both jobs?========>>>>>>>>>>>>>>>>>>no;as mentioned above aslongas you have tax liability on your 1099 in come, you need to pay estimated taxes;as you become self-employed, or earn enough money on the side, you get paid by sources that that do not withhold taxes from your check



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