I have not paid estimated taxes for my wife's 1099 wages for the first 5 months of 2023. Do I pay those taxes late or are they covered in the 2023 Income Tax Return?

Forum|Forum|2 years ago
April 12, 2024
3 replies
0 views

Are payroll taxes part of the calculation for what is owed as well?

TurboTax Online

Best answer by VolvoGirl

Yes you will just owe any tax on your 1040. You may have a penalty if you end up owing too much. The self employment tax is included on your 1040.

You pay Self Employment tax (Scheduled SE) on a Net Profit of $400 or more on Schedule C in addition to regular income tax on it. You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400). The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire.

The SE tax will be automatically included in your tax due or reduce your refund. It is on the 1040 Schedule 2 line 4 which goes to 1040 line 23. The SE tax is in addition to your regular income tax on the net profit. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 15 which flows to 1040 line 10.

VolvoGirlAnswer

Employee

Yes you will just owe any tax on your 1040. You may have a penalty if you end up owing too much. The self employment tax is included on your 1040.

Mike9241

I'll assume you're filing a joint return. her 1099 income is reported on the joint return using schedule C (since it seems the 1099 is for work she did rather than another source of income such as rental real estate)

on the joint 1040, you'll pay income taxes on both of your incomes as well as self-employment taxes on her earnings. there will be penalties unless you meet one of the following criteria

federal withholding
1) and timely estimated tax payments equal or exceed 90% of your 2023 tax or
2) and timely estimated tax payments equal or exceed 100% of your 2022 tax (110% if your 2022 adjusted gross income was more than $150K) or
3) the balance due after subtracting taxes withheld from 90% of your 2023 tax is less than $1,000 or
4) your total taxes are less than $1,000

state laws vary.

TaxCPA1

It is too late to pay estimated taxes for 2023. When you file your 2023 tax return, you will likely show a balance due, since you did not pay the estimated taxes. So, yes, the taxes owed will be covered in the 2023 tax return. You may also have to pay the Underpayment of Estimated Tax Penalty since you did not pay Estimated Taxes for the first 5 months of 2023.

Self Employment taxes may be owed on income from Form 1099 depending on the net amount of self employment income (i.e. Gross Income Less Expenses equals net self employment income). If the net amount is less than $400, no SE Tax will be due.

I hope that helps!