Personal Finance (Not Investing) • Self Employment - Estimated tax

Hi,

Me - W2 employee - made about 300k in 2023
Spouse - Was W2 employee for first half of 2023 - made 42 K. Then became a LLC as an independent contractor (IC) and made about 32K starting in August 2023.
We file married filing jointly

My Questions:

1. We did not make any quarterly estimated tax for the ~2K IC income in august 2023 on the Sep 15 due date. Is this a big problem ?
2. I am trying to calculate the quarterly payment for the Jan 16th, 2024 deadline for my spouse. Since this is the first year that my spouse is an IC and we are filing jointly, i am unable to figure out a 90-110% rule from last year since that all includes my income as well.
Trying to calculate it in other ways
Net IC income: 32K
Self Employment tax: 32K x 92.35% x 15.3% = 4521K
Solo 401K employer/employee contribution: 17K (employee contribution ~ 12 K [after prior w2 job contribution]; employer contribution - 20% of 30 K [32 K - 1/2 of SE tax] = ~5K)
50% of self-employment: 2260
Ignored standard deduction
Taxable income: 12K
Tax bracket: 17% (total based on last year)
Income tax: 15K x 17% = 2000

Total quarterly tax to be paid in JAN = 4521+2000 = 6521 or ~ 6500$

Does this sound right ?

TIA

Statistics: Posted by midwestguy1112 — Mon Dec 25, 2023 11:23 am — Replies 0 — Views 18

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