Chat or Talk in the INReview Discussion Forum Chat or Talk in the INReview Discussion Forum
 
register chat members links refer search home
INReview INReview > The Scuttlebutt Lounge > Politics & Government > Taxes > Estimated taxes?
Search this Thread:
  Print Version | Email Page | Bookmark | Subscribe to Thread
Author
Thread Post New Thread   
MissBee
Rookie

offline
Registered: Apr 2004
Local time: 02:45 PM
Location: OH, USA
Posts: 1

Unhappy Estimated taxes? post #1  quote:



Hi,
I am new to the forum and hope someone can help me with my question.

Here it goes: In March I started to work as a freelance graphic designer for a firm. I make about $900 a month and it's my only source of income. I understand that I will have to pay income and self-employment taxes out of that money and I calculated it to be about 15%. Does that sound right? Someone told me it can be as much as 30%!

Anyway, what I really don't know is if I have to file for quarterly estimated taxes or not...
I read through the 505 publication but it is way complicated. My situation: The 1040ES says that "You do not have to pay estimated tax if you had no tax liability for the full 12-month 2003 tax year". I did not have any income in 2003 because I wasn't working. Me and my husband filed a joint tax return however and got a refund for that. So does that mean that I don't have to worry about paying estimated taxes this whole year, or do I?

In case I have to pay estimated taxes can I file the 1040ES as single and still be able to file a joint tax return at the end of the year? This is very important to me because I'm an alien resident and the INS wants joint tax returns for me and my husband as proof of a valid relationship. I don't want to pay estimated taxes for my husband who is a full employee of the US Armed Forces and has all his taxes witheld already and the calculations for that are just too complicated for me...

Regarding estimating your tax... I only worked as a freelancer 1 month in the first quarter. I understand that all quarterly payments must be equal (?). Do I just calculate the expected income for the whole year and devide it by 4 - even though I don't earn the same amount each quarter?

I am really confused about what one is supposed to do if they're not sure if the income is going to be steady. It may well happen that I will not work as a freelancer this whole year, or it may happen that they decide to increase my payments at some point. I estimated that I will owe about $1300 in taxes if I keep working there the whole year. But it may well not happen. So is it wise to just go ahead and pay the quarterly estimates, even though I may end up owing less than $1000 at the end of the year?

We let HRBlock do our end of the year taxes because it's way too complicated to do on our own. I just want to know what I need to worry about now. Thank you!


Old Post 04-01-2004 05:37 PM
Click here to Send MissBee a Private Message Find more posts by MissBee Add MissBee to your buddy list Click Here to Ignore MissBee REPORT this Post to a ModeratorNOMINATE this Post for Reward Points Reply w/Quote

Ken NJ
INReview Maven

offline
Registered: Dec 2003
Local time: 02:45 PM
Location: NJ
Posts: 4930

You Pay Only The Net Income Times 3 Tax Rates post #2  quote:

Hard to follow your fact pattern, but it looks like you are only concerned about estimate payments for the first quarter of 2004 for which you have no income for the 2003 year, is that right? On that basis, you should remit 1/4 of what you estimate will be due for your annual income tax (est. 10% to 15%) AND 15.3% (SE Tax 12.4% plus Medicare 2.9%) against your quarterly NET earnings. That means income less allowable expenses. Go back and add up what you earned from Jan. to Mar. 2004 and if you don't think you will work for the last half year use the lower rate of 10%. You can also use the worksheet in the instruction form to help you make the estimation. It's just an estimate. You can use 25.3% if you think you will only work a few months this year, when combining your net income with your husbands in 2004.

If you're confused, that's why HR Block and other preparers are there to help you for a fee. If you don't want to pay that fee, check around your library and the local tax offices to see if they have free tax helps to guide and review your work for free before filing. Good luck.


Old Post 04-01-2004 06:53 PM
Click here to Send Ken NJ a Private Message Find more posts by Ken NJ Add Ken NJ to your buddy list Click Here to Ignore Ken NJ REPORT this Post to a ModeratorNOMINATE this Post for Reward Points Reply w/Quote
Time: 07:45 PM Post New Thread   
  Print Version | Email Page | Bookmark | Subscribe to Thread
INReview INReview > The Scuttlebutt Lounge > Politics & Government > Taxes > Estimated taxes?
Search this Thread:
Forum Rules:
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is OFF
vB code is ON
Smilies are ON
[IMG] code is ON
Forum Policies Explained
 
Rate This Thread:

< >

Copyright ?2000 - 2018, Jelsoft Enterprises Limited
Page generated in 0.02976608 seconds (80.76% PHP - 19.24% MySQL) with 35 queries.

ADS

© 2018, INReview.com.   Popular Forums  All Forums   Web Hosting by Psyphire.
INReview.com: Back to Home