How does one report 1099-Misc Income and make estimated tax payments?
Do I have to actually do a Schedule C?
Firstly, I think the Company should be sending you a 1099-Misc as it is required by Law. Nevertheless, the income earned is reportable.
You do not have to file a Scheduel C unless you have expenses that need to be deducted against the self- employed income that you earned. I would suggest instead that you report the income on Schedule C-EZ and claim some necessary and ordinary expenses along with any auto mileage expenses in connection with the consulting job.
If you do not have any expenses to report against this self-employment income, I would report this income as Miscellaneous Income subject to S/E tax.
Am I better off filing taxes as "married filing jointly" or would we be better off to file separately?
Yes, in my experience, it would be better to file MFJ, as this income is not very material.
Do I have to do quarterly estimated taxes for this side job? I make roughly $1,000 a month.
The projected income would be $12,000 per year and the Self-employment tax generated assuming no expenses are incurred to offset this income would be around 15.3% x 12,000 = $1,800. Furthermore, lets assume your tax rate is is 15%, this would result in an additional tax liability of another $1,800. The total tax liability therefore, would be approximately $3,600.
I suggest you can either have your spouse withhold an additional $3,600 for the year by increasing the federal tax withholding by approximately $150 per bi-weekly pay or you could pay $900 federal estimated quarterly tax payments.
Your Turbo tax program will allow you to print these estimated tax vouchers and the first voucher is due April 15th 2008. Follow the instructions and the program will allow you to print 4 vouchers along with address label where to mail the payments.