Estimated Taxes

[MarryMe987654 244]

Hello,

 

I have been trying to figure this out and hoping you guys can help me.

 

I have been married since August 2019 and my husband filed MFJ for 2019.

Employed February 2020. Got my GC in March 2020.

 

I am trying to figure out the taxes that I need to pay but the estimator in IRS is telling me that I won't be owing anything it calculates my husband's earning and tax info as well since we are MFJ. That doesn't seem right to me.

 

Re my job-- I work as a contractual QA for a Canadian software company. I get 38k CAD. No deductions or benefits taken out from my paycheck. I get paid every 15th and 30th of the month.

I received Pell Grant last week for $3k.

 

How do I calculate my tax payments and when and where should I make payments on it?

 

Thank you.

Edited May 27, 2020 by MarryMe987654

[NancyNguyen 1,657]

It is only half of 2020, you need to file next year not now.

[MarryMe987654 244]

3 minutes ago, NancyNguyen said:

It is only half of 2020, you need to file next year not now.

True. But I thought I can make quarterly payments on it so it's not too much of a payment by next year. I also want to make sure that the $300 that I am setting aside every month is enough to cover it.

[NancyNguyen 1,657]

You need to talk to a tax advisor, because your income needs to combine with your spouse, not your income alone.

[kris&me 572]

she is talking about the quarterly estimated tax payments to make as she is self employed (nothing is taken out as she is contracted by a company)

 

https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-centerhttps://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

[Lil bear 4,261]

3 hours ago, MarryMe987654 said:

Hello,

 

I have been trying to figure this out and hoping you guys can help me.

 

I have been married since August 2019 and my husband filed MFJ for 2019.

Employed February 2020. Got my GC in March 2020.

 

I am trying to figure out the taxes that I need to pay but the estimator in IRS is telling me that I won't be owing anything it calculates my husband's earning and tax info as well since we are MFJ. That doesn't seem right to me.

 

Re my job-- I work as a contractual QA for a Canadian software company. I get 38k CAD. No deductions or benefits taken out from my paycheck. I get paid every 15th and 30th of the month.

I received Pell Grant last week for $3k.

 

How do I calculate my tax payments and when and where should I make payments on it?

 

Thank you.

On advice from our tax accountant , I set aside 30% of each month’s income for estimated tax Payment. I pay quarterly through the IRS payment site 

Edited May 27, 2020 by Lil bear

[MarryMe987654 244]

Thank you for the responses. These are certainly helpful. 

 

I forgot to mention that we live in Florida and we don't pay state taxes. Thank you. 

[Wuozopo 4,293]

20 hours ago, MarryMe987654 said:

Hello,

 

I have been trying to figure this out and hoping you guys can help me.

 

I have been married since August 2019 and my husband filed MFJ for 2019.

Employed February 2020. Got my GC in March 2020.

 

I am trying to figure out the taxes that I need to pay but the estimator in IRS is telling me that I won't be owing anything it calculates my husband's earning and tax info as well since we are MFJ. That doesn't seem right to me.

 

Re my job-- I work as a contractual QA for a Canadian software company. I get 38k CAD. No deductions or benefits taken out from my paycheck. I get paid every 15th and 30th of the month.

I received Pell Grant last week for $3k.

 

How do I calculate my tax payments and when and where should I make payments on it?

 

Thank you.

You might try creating an online TurboTax acct for yourself and doing a “what if” return. 2020 will be different but putting your numbers into a 2019 program will give you an estimate. Figure out what you will earn this year from Feb start date until Dec 31. Convert to US dollars.

 

Your income goes on a Schedule C because as a contractor, you are considered self-employed to the IRS. It is like you own a small business. If you have any expenses associated with your employment, you get to take business expenses off. You probably don’t have much if any, but special phone line or office supplies like paper or ink required could be deducted.  You will come up with a net profit from your business.  Another perk is you may get a deduction for your health insurance as self employed.

 

You will also have a Schedule SE (Self-employment tax) in your return. That is where you calculate how much Social Security and Medicare you have to pay, in addition to income tax. (Some of it will get credited back)

 

Schedule C profit transfers to Schedule 1 (line 12) which eventually goes to the 1040.

Schedule SE calculations transfers to Schedule 2 which eventually goes to the 1040.

(Using a tax program will automate all this and put things where they need to go. I am just telling you what additional Schedules your going to see in your tax return.)

 

Your husbands wages, amount paid in, etc will also be entered since it’s a joint return.  Also anything else like interest that he put on the 2019 return. 

 

So now you have a “what if” return like yours already filed, but you’ve added in your self employment to get a picture of what 2020 might look like. TOTAL TAX on line 16 ought to give you a good idea of how much extra your income will add on to the joint tax if you compare it to TOTAL TAX on the return already filed.  Then you divide your estimated share by 4 to get a quarterly “guesstimate” of what you would submit to the IRS to cover your part. 
Typically the due dates for the quarterly payments are

Apr 15

June 15

Sept 15

Jan 15 next year

BUT this is a pandemic year and the first two payments are delayed until July 15. If you want to just divide your guesstimate into 3 payments (July, Sept, next Jan) you can do that. It is an estimate and IRS doesn’t expect it to be exact.  Also note if your husband paid a lot of extra in through withholding from his paycheck, his extra would cover yours rather than being refunded. It doesn’t have to come from you specifically because it’s a joint return. As long as one or both of you is feeding the tax man during the year, the IRS is happy. They do not want you to owe it all at the end.  
 

Hope this gives you a little guidance. Estimating is always a big guess in my opinion. Just come up with a number and send a bit in and all will be well. It is not super strict. If you send too much, it adds to the refund. If you don’t send enough, perhaps your husband’s withholding covers it. 

 

 

 

 

 

Edited May 28, 2020 by Wuozopo

[MarryMe987654 244]

Thank you, @Wuozopo, this is an awesome, detailed response. 

 

We kind of want to make sure that he still gets a refund because he splits it with his wife because of the dependent child that they share together.

[Wuozopo 4,293]

30 minutes ago, MarryMe987654 said:

Thank you, @Wuozopo, this is an awesome, detailed response. 

 

We kind of want to make sure that he still gets a refund because he splits it with his wife because of the dependent child that they share together.

Well he can figure out how much the child benefitted his taxes by leaving the child off and comparing his Total Tax with and without when you do the actual return.  Then share half of the child benefit. Just giving half the refund is not the way to do it because you may also be adding to that refund. or he may be paying in an excess that has nothing to do with how much the child benefited his return. We buy TurboTax software to install so we can create various “what if” situations and save them under different file names. That way you don’t mess up your original file by changing things.

Edited May 28, 2020 by Wuozopo