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independent contractor

Forum|Forum|1 year ago
August 1, 2024
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Hi, my name is Heather, and I have a couple of questions. I work a full-time job that withholds taxes from my income. I also work for about seven companies as a mystery shopper. Last year I only received a 1099 from one of them. I noticed that last year I was charged a penalty for not filing quarterly taxes, but I have been working as a mystery shopper for about 6 years and never paid a penalty before for paying my taxes in February. My income varies from month to month. Do I need to be paying taxes quarterly or can I pay them at the end of the year? If I need to be paying quarterly how do I figure out how much to pay?

Best answer by xmasbaby0

Income taxes are "pay as you go"---so if you expect to owe more than $1000 at tax time, it would be in your best interest to make estimated payments during the year instead of letting it all pile up and having a big tax bill plus an underpayment penalty at tax time.

Since you have self-employment income you owe self-employment tax for Social Security and Medicare as well as ordinary income tax. You are responsible for reporting ALL of your self-employment income whether they issue a 1099 or not, so make sure you are keeping your own careful records of the amounts you get from the mystery shopping job.

You could start making quarterly estimated payments or you could also have more withheld from your paychecks from your W-2 job. That could be done by preparing a new W-4 for the job that withholds tax -- on line 4c of the W-4 you can request to have extra tax withheld from your pay.

https://turbotax.intuit.com/tax-tools/calculators/w4/

https://www.irs.gov/individuals/tax-withholding-estimator

https://www.irs.gov/pub/irs-pdf/fw4.pdf

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

https://turbotax.intuit.com/tax-tools/calculators/self-employed/

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