Originally Posted by Ramzavail
#1:So, if I wanted to pay an estimated income tax payment? How much should I pay?
#2and if I wanted to pay an estimated SECA tax payment? How much should I pay?
#1; it depends; you may not have to make estimated tax payments aslongas SAY you/ your spouse have enough tax withheld from her/your W2 job to cover taxes on all her/your W2 income, including your self-employment income. You/ your spouse can even increase the amount you/your spouse have withheld from your paycheck so it covers income from both sources. Then you need to make sure you have enough total tax withheld and paid in estimated taxes to avoid a large tax bill when you file.I can not tell you how much you must pay; Don?t put too much importance on how accurate your tax estimate is for now.you need to calculate if u owe $1k or more for 2016 after subtracting income tax w/h and refundable credit(s) on your 1040,if yes, then, by Jan 15th 2017, There are "safe harbor payments" ?a payment that ensures you will not be penalized.As you are married, filing jointly and your AGI is below $150K, you may make a payment equal to 100% of what you paid in income taxes the previous year or 90% of the tax you estimate for the current yearof 2016.however if your AGI is $150K or more you must make a payment equal to 110% of the previous year?s taxes or 90% of the tax for the current year of 2016.
In either case, you will still owe taxes at the end of the year, but you will not face penalties and interest.
The federal tax system is a pay-as-you-go tax system, meaning that as you earn the money, you must pay taxes on it rather than waiting until the end of the year and making a one-time, lump sum payment.
#2;it depends; PLZ read carefully what I wrote; It should be noted that anytime self-employment tax is mentioned, it only refers to Social Security and Medicare taxes and does not include any other estimated taxes that self-employed individuals may be required to file. you usually pay your SECA tax that is essentially the same as the FICA tax that is paid by employers and employees for Social Security and Medicare. (there is no estimated SECA taxes, but you pay your self employment tax when you file form 1040) when you file your return ; You need to calculate your self-employment tax on Sch SE and report that amount in the Other Taxes section of Form 1040. When figuring self-employment tax you owe, you reduce your self-employment income by half of the SE tax before applying the rate. You also claim 50% of what you pay in self-employment tax as an adjustment to income, which is allowed on the front of your Form 1040. For example, Say you run a mall business as a sole proprietor. In 2016 your net profit as reported on Sch C is $75K. Your net earnings subject to the SE tax is calculated on Form SE and would be $69,262.50 ($75K x 0.9235). Your self-employment tax would be $10,597.16 ($69,262.50 x 0.153) and you would report that amount on Form 1040 in the Other Taxes section.You would also report one-half of your self-employment tax, $5,298.58, ($10,597.16 X .50) on Form 1040 as an adjustment to income, which reduces your AGI and the amount of income tax you owe.You do not pay quarterly estimated SECA taxes.
The rule is that you must pay your taxes as you go.Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If the amount of income tax withheld from your self-employment income is not enough , you may have to make estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. If you expect to owe MORE than $1K in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this year, then, you need to pay estimated taxes.