Question

How can I estimate my taxes with TurboTax?

Forum|Forum|2 years ago
August 30, 2023
2 replies
0 views

Hello,

New independent/booth renting hair stylist. Established an LLC for my business.

How do I go about estimating my annual taxes with TurboTax, so that I know what I need to pay quarterly?

Thank you!

Ask the Experts - Self-Employed - Aug 2023

AnnetteJD

Hi Rwhalen 1!

Congratulations on starting your business! I am a Manager with TurboTax and I am happy to help you today. Below is some great information on this topic, both about how to handle taxes if you are self-employed AND how to calculate your estimated taxes. Good for you for planning ahead!

https://turbotax.intuit.com/tax-tips/self-employment-taxes/a-tax-guide-for-solopreneurs-self-employed-tax-tips-/L6N77a4mr

https://turbotax.intuit.com/tax-tips/self-employment-taxes/myths-about-quarterly-taxes-for-the-1099-tax-form/L46qZt376

S

SwapnaM

Thanks @rwhalen1 for your question!! Congratulations on your new business!!

If you have used the TurboTax software to file your 2022 tax returns, 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)

TurboTax help article: How does TurboTax calculate my estimated tax payments?

Starting a new business-Tax implications!

You can also try using the Taxcaster tool: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

R

rwhalen1Author

What is the best way to estimate just for this new business? I am not sure how my previous taxes would help since I was a W2 employee.

I expect to make about $80,000, with about $20,000 in expenses (both rent, supplies, credit card transaction fees)

Few questions:
1) Does my spouse's income come into play with the estimate or just taxes for this business? We historically filed jointly, so not sure how to handle this business of mine.
2) Do expenses come into play for estimated payments, so do those apply during annual filings?
3) Does the estimate include self employment tax + federal? What about state taxes?

When I put in $80K to the tax estimator tool, it says my estimate is ~$15K, which is only about 19%, which seems low. There was also a ~$41K deduction amount, equalling taxable income being at about $38K.

I do not understand where these numbers are coming from 🙂

S

SwapnaM

1) yes, you spouse income estimated for current year should also come into the picture if you are filing married filing jointly. You can try out the option of filing Separately as well in the tax caster tool.

2) under the self employed section in Tax caster, enter the net income estimated from business. So expenses are deducted from gross income.

3) yes estimated taxes include, self employment taxes & federal.

4) for state taxes, you would need to visit your state website, if you need to file estimated taxes.

Check the IRS' list of state's department of revenue sites to see your state's requirements. They should also tell you how to make tax payments.

If you don't see your state, reach out to your state's tax franchise board or department of revenue.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"