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Old 11-11-2015, 02:50 PM
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SE liability < $1000, estimated quarterly?

Hello all,

I am starting a side job as an independent contractor.
After expenses, I expect my tax liability to be about $800.

Since my liability is less than $1000, do I ignore quarterly payments and just pay when I file my personal and W2 related taxes?

I typically use TurboTax. I assume this will take my Schedule C and tack on the appropriate taxes?



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Old 11-11-2015, 03:05 PM
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Since my liability is less than $1000, do I ignore quarterly payments and just pay when I file my personal and W2 related taxes?===>>Then no; you do not have to pay quarterly estimated taxes to IRS / your state. In reality many self employers do not [pay quarterly estimated taxes due to lower penalties and interest ( as their tax liabilities are not so high ). SO in principle, you have to pay estimated taxes if you expect to owe at least $1kin federal tax for the year. however you may have to increase withholding amt on your W4 to prevent lower tax w/d since, besides your W2 incoem, you have self employment income.

I typically use TurboTax. I assume this will take my Schedule C and tack on the appropriate taxes?=====>.Correct; you need to report your self employer income on Sch C of 1040; aslongas the amt reported on Sch C on line 29 / 31 is $400 or exceeds $400 youmust file return and also aslongas the amt reported on Sch SE on line 2 / 3 is also $400 or exceeds $400 then youmust pay self employment taxes of 15.3% but you can calom50% of the seca taxes on 1040 line 27.



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Old 11-11-2015, 03:57 PM
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Join Date: Oct 2010
Posts: 5,233
Quote:
Originally Posted by cjaldous View Post
Hello all,

I am starting a side job as an independent contractor.
After expenses, I expect my tax liability to be about $800.

Since my liability is less than $1000, do I ignore quarterly payments and just pay when I file my personal and W2 related taxes?

I typically use TurboTax. I assume this will take my Schedule C and tack on the appropriate taxes?
it depends on some variable I guess; As you can see, basically, your tax rate/ tax liability increases as your taxable amount increases so your taxable income increases(decreasex) as your self employment income on Sch C increases(decreases).in general, you, as a Self employed, person are taxed on your net self-employed income, net earnings, I mean in contrast to employees who are for the most part taxed on their gross wages before any work-related deductions.however, various business related operating expenses can be deducted directly against income by you on your SCh C of 1040. Also, aslongas the amt reported on Sch SE line2 / 3 is $400 or exceeds $400 then you need to pay seca taxes of 15.3% to IRS however, you may claim 50% of your taxes on 1040 line 27. Also, UNLIKE most of W2 reg EEs, you , as a self employer, claim your NOL incurred from your biz; if your biz has more expenses than income during its tax year, then you may have a net operating loss. This loss can be used to offset income in other years. For example, the loss carried back is used to offset the taxable income of previous 2 years, with the earliest year offset first. UNLESS the loss is fully used up in the carry back years, any unused portion of the loss may be carried forward for up to 20 years after the NOL year. Any NOL that is not used up in the carryover period is lost.So it, your self employement icnoem taxes, vary, depending on some variables



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Old 11-12-2015, 12:39 AM
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Sory for the wrong post for another inquirer~



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