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October 27, 2021
Question

Filing jointly for first time. My husband is a W2 employee but I am self-employed 1099

  • October 27, 2021
  • 1 reply
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I got married in August 2021 and will be filing jointly for the first time. My husband is a W2 employee but I am self-employed 1099. My self employment income rose significantly in 2021 (unexpectedly) and I haven't paid quarterly taxes. How do I know if I need to pay quarterly taxes, and do I even need to do this if I am filing jointly? Thanks so much!

    1 reply

    October 28, 2021

    The general rule is that you must pay taxes as you go or make estimated tax payments on self employed income or other income which does not have a withholding. Meaning that when you file your tax return, if you haven't paid enough taxes through withholdings or estimated tax payments then you might owe an underpayment penalty. 

     

    To determine whether you need to make quarterly estimates, answer these questions:

     

    1. Do you expect to owe less than $1,000 in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this year? If so, you're safe—you don't need to make estimated tax payments.
    2. Do you expect your federal income tax withholding (plus any estimated taxes paid on time) to amount to at least 90 percent of the total tax that you will owe for this tax year? If so, then you're in the clear, and you don't need to make estimated tax payments.
    3. Do you expect that your income tax withholding will be at least 100 percent of the total tax on your previous year's return? Or, if your adjusted gross income (Form 1040, line 8b) on your tax return was over $150,000 ($75,000 if you're married and file separately), do you expect that your income tax withholding will be at least 110 percent of the total tax you owed for the previous year? If so, then you're not required to make estimated tax payments.

     

    If you answered "no" to all of these questions, you must make estimated tax payments using Form 1040-ES. To avoid a penalty, your total tax payments (estimated taxes plus withholding) during the year must satisfy one of the requirements above.

    Since it is the first time you are filing married joint, look at your personal tax return from last year in order to determine if you need to make any estimated tax payments. You can still make payments until Jan 18, 2022. Married filing joint taxpayers need to make estimated tax payments too. Congratulations on getting married this year!

    KG831Author
    October 28, 2021

    thank you!

    October 28, 2021

    You are welcome. Thank you for participating in "Ask the Expert" event