Question

Partial 1099 income

Forum|Forum|2 years ago
August 30, 2023
1 reply
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I was employed for the first six months as a full-time employee. I was laid off in June, and started a new job in June that's contract work (1099), which withholds no taxes. Approximately how much of my income should I be saving for taxes?

Ask the Experts - Self-Employed - Aug 2023

JBedford

Hi, @AJVW4435 , thanks for the question!

The bare minimum you should pay in total tax payments is 100% of your 2022 tax liability from Line 24 of your Form 1040. If you make over $75,000 as a single filer, or $150,000 if married filing jointly, in self-employment income, then you should pay 110% of that number. This will allow you to avoid an underpayment penalty. You should count any tax payments you've already made, such as your withholding from the first part of the year. Then, you should make quarterly estimated tax payments for the rest of the year to make up any difference.

Hope this helps, please let me know if not!

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A

AJVW4435Author

Is this still the case if my income this year is drastically increased over my 2022 income?

JBedford

It's still the safest method, @AJVW4435 , since it's a known number. However, the IRS will also accept 90% of your current year's tax liability. It's just more difficult to calculate that number in advance of filing your tax return.

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