Making estimated tax payments for first time

[Alchanphel 14]

Hi all,

 

I moved to the US in 2021 via k-1 visa. I live in New Jersey. Did not file taxes for 2021 as didn't have to.

 

Received EAD and SSN in April 2022, and have been remote working as independent contractor for the last few months (mainly for a UK based employer, but about to start on new contract with US-based employer).

 

I'm aware I need to make estimated tax payments, and have a rough idea of the $ amount to pay.

 

However, I'm struggling to figure out how to actually make the payments this in practice - can anyone please advise? When I try to use IRS DirectPay website for example, it wants me to verify my identity using information from my previous 1040 filing history - which obviously I don't have as I've never paid taxes in the US before.

 

Thanks!

 

 

[Mike E 11,739]

Generally if you paid no taxes in 2021 you don’t have to make quarterly estimated taxes in 2022.  However of you are filing a joint tax return and your spouse paid taxes on 2021, then you might have to make estimated tax payments.  
 

Just mail your estimated taxes. Look for form 1040-ES on the IRS website, download it, print it,  fill it out and enclose it and a check into an envelope and mail to the IRS.  

Edited May 30, 2022 by Mike E

[JeanneAdil 6,510]

It is best to pay the quarterly estimated taxes so u ,  yourself ,  are paying into SS and medicare for the credit needed later to collect these benefits 

u can pay them under MJS at tax time but the following applies

 

https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

 

If you don’t pay enough tax through withholding and estimated tax payments, you may be charged a penalty. You also may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return.

 

Paying it under MFJ  does not give u ,  yourself,  SS credits 

[Mike E 11,739]

I’ve filed dozens of tax return as MFJ with one or either spouse having businesses, and IME estimated taxes don’t have anything to do with which spouse gets SS credits.  Instead each form SE determines which spouse gets credit.  
 

When I filed taxes for first time as a GC holder, where I had significant self employed income,  due to the 90/100 rule, my conscious decision  to not file estimated taxes and resulted in zero penalties and zero interest. 

[Wuozopo 4,293]

13 hours ago, JeanneAdil said:

Paying it under MFJ  does not give u ,  yourself,  SS credits 

That is not correct information about how estimated tax payments work. Social Security credits are applied when the actual tax form of the self employed worker is filed at tax time. His Schedule SE calculates his Social Security amount due and gives credit based on his SSN on the form, even on a MFJ return.  

[Alchanphel 14]

Thanks for all the replies everyone - super informative!

 

Based on these replies, I think I will just mail my estimated tax payments as a check to the IRS.

 

A couple more questions from me:

 

• I haven't made any estimated payments this year yet - can I just write a single check for the year to date in June/July?
• Does it matter if I miss the quarterly estimated tax payment deadlines (April, June, Sept, Dec)? As a new taxpayer, I'm not obliged to make any estimated tax payments anyway - therefore how can there be a penalty for missing these?
• As I now have a SSN, is it worth trying to retroactively file taxes for last year and try and claim the Covid stimulus payment? I arrived in July 2021, and earned no income for the remainder of that calendar year.

Thanks!

[Mike E 11,739]

1. Yes

 

2. no

 

3. I would for 2021. 
 

As an aside if you don’t need to make quarterly payments you should not. Keep your 2022 filing simple.  

[Wuozopo 4,293]

50 minutes ago, Alchanphel said:

As I now have a SSN, is it worth trying to retroactively file taxes for last year and try and claim the Covid stimulus payment? I arrived in July 2021, and earned no income for the remainder of that calendar year.

Did you receive your SSN prior to April 18 (tax filing deadline)?  If no, you aren’t eligible for the stimulus. Your wife could filed an amended return and add you as a joint filer which would likely be a tax benefit even without the stimulus over her filing Married filing separately. Work it out and see what the difference is. You would report your UK earnings before arrival.