Author Topic: DW's 1099 job and (estimated) taxes  (Read 1094 times)

jamesbond007

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DW's 1099 job and (estimated) taxes
« on: September 06, 2017, 02:25:06 PM »
So DW just joined a job that pays $12/hour. She was a SAHM till now. We figured a little extra income couldn't hurt :) She got her first paycheck and we noticed that they did not take taxes from it. They just paid by the hour and gave a check for the whole month. Later she confirmed that she would get a 1099. So, does she has to pay estimated taxes every quarter? Or is it OK to put it off until tax return time next year and reconcile at once?

MDM

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Re: DW's 1099 job and (estimated) taxes
« Reply #1 on: September 06, 2017, 03:25:26 PM »
"She" doesn't have to do anything.  Between "the two of you", there needs to be enough withheld at any time during the tax year (or paid via timely estimated tax payments during the year) to fit into one of the "safe harbors" - i.e., the inverse of Who Must Pay Estimated Tax.

In other words, you pay no penalty if any of the following apply.
- You expect to owe no more than $1,000 in tax for 2017, after subtracting your withholding and refundable credits.
- You expect your withholding plus your refundable credits to be greater than or equal to the smaller of:
        90% of the tax to be shown on your 2017 tax return, or
        100% of the tax shown on your 2016 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers , later). Your 2016 tax return must cover all 12 months.


jamesbond007

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Re: DW's 1099 job and (estimated) taxes
« Reply #2 on: September 06, 2017, 03:57:25 PM »
Got it. Thanks.

BTDretire

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Re: DW's 1099 job and (estimated) taxes
« Reply #3 on: September 07, 2017, 10:31:11 AM »
Got it. Thanks.
Be aware, you will owe 15.2% SS tax and 15% or more in Federal income tax.
So at least 30%. It's possible some of the costs to earn that income would be deductible.

jamesbond007

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Re: DW's 1099 job and (estimated) taxes
« Reply #4 on: September 07, 2017, 11:57:02 AM »
Got it. Thanks.
Be aware, you will owe 15.2% SS tax and 15% or more in Federal income tax.
So at least 30%. It's possible some of the costs to earn that income would be deductible.

Of course. I was more concerned of any trouble if I don't pay estimated taxes.