Self-employment quarterly payments?

Forum|Forum|3 years ago
February 15, 2023
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Do you have to make estimated self-employment taxes quarterly (assuming approximately $6,000/yr in self-employment income)? If so, how do you figure out how much to pay? TurboTax helps you make estimated payments for federal and state taxes, but what about estimated self-employment taxes?

Thanks!

Best answer by AliciaP1

Okay, thanks. I think I should have made my original question more clear. So, TurboTax does not assist in any way for making estimated self-employment (meaning FICA & Medicare) payments?

No, but it doesn't need to. The IRS assigns the amount of FICA (which is Social Security tax and Medicare tax combined) based on what is calculated on your tax return. There is not a separate process for paying FICA taxes unless you pay payroll and issue W-2s.

Self-employment taxes are only determined once you have the full year of activities reported. That amount is added into your Total Tax on your annual individual tax return. You now just have "Tax" to pay. Your withholdings (if you have any) and the estimated payments you may have made are applied to the Tax amount and you are left with either an amount due or if you're lucky, a refund.

@slyeddie

HelenC12

Whether you need to pay estimated taxes depends on your situation. There are so many variables. Is the $6,000 income before business expenses or after business expenses? Do you currently get a large refund that may cover the increase in self-employment (SE) tax and income tax?

The rule is that you must pay your taxes as you go throughout the year through withholding or making estimated tax payments.
Your estimated taxes are due each quarter if you have a gain or profit (income less expenses) from your business. If you have a loss one quarter, you don't have to pay estimated tax.

For self-employment income taxes, you need to factor in the fact that you pay self-employment (SE) taxes in addition to federal income taxes and state income taxes (if applicable). The SE tax rate is 15.3% with 12.4%for Social Security and 2.9%for Medicare.

Please see the TurboTax Article Estimated Taxes: How to Determine What to Pay and When.

Scroll down to Do I need to pay estimated taxes? to determine whether you need to make quarterly estimates.

If you do need to make estimated tax payments, scroll down to How should I figure what I owe?

One way to estimate what you need to pay is to create another Online account in TurboTax and enter all your 2022 income, deductions plus your estimated self-employment income. It's free as long as you don't print it.

You'll be able to get a good estimate of what your tax will be for the year and whether you'll need to make estimated payments or not.

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slyeddieAuthor

I will have $6,0000 of income from self-employment next year (from a side-gig). I guess what I'm really asking is does TurboTax include the "extra" stuff like FICA and Medicare (self-employment tax) in the federal estimated taxes for next year?

Thanks!

DavidD66

At the end of your state return, TurboTax will ask if you want to make estimated tax payments. If you indicate yes, the program will help you calculate the amount. We'll even generate the payment vouchers for you to print along with your return.

TurboTax calcuates estimated tax payments for 2023 based on your 2022 tax info, we'll use the lower of the following IRS-approved methods to calculate your estimated tax payments.

90% of your estimated 2023 taxes.
100% of your actual 2022 taxes (110% if your adjusted gross income was higher than $150,000, or $75,000 if Married Filing Separately)

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