I was unemployed 1/2 of 2005 and all of 2006. I began working for an LLC in Jan of 2007. Taxes are not taken out of my paycheck. My question is, do I need to file a 1040-ES? There is an EXCEPTION listed on the first page of the form stating that if I had no tax liability for the full 12-month 2006 tax year - I do not have to pay estimated tax for 2007. I am married filing jointly, does that have any change in the situation? Where can I get a definitive answer so as to begin making estimated payments or not have to worry about this.
2007-04-18 07:09:28 · 5 answers · asked by Brian P 1 in Business & Finance ➔ Taxes ➔ United States
probably - estimate your net income. Don't forget about self employment tax - 15.3%. ES pmts are made quarterly to the IRS & your state taxing authority.
2007-04-18 07:16:32 · answer #1 · answered by JessicaRabbit 6 · 0⤊ 0⤋
Since you are MFJ, you DID have a tax liability in 2006 on that joint return. So, yes, you either must make quarterly estimated payments OR your spouse can have additional tax withheld through their W-2 job.
As long as 90% of your total tax liability is paid in OR 100% of the 2005 liability is paid in you won't be facing any penalties for underpayment of tax. However, even if you can escape making estimated payments under the 100% rule above you STILL will have to pay taxes on those earnings. If you don't make estimated payments you WILL have a potentially HUGE bill at tax time next year.
2007-04-18 07:19:02 · answer #2 · answered by Bostonian In MO 7 · 4⤊ 0⤋
If you file a joint return with your spouse, then that exception doesn't apply unless NEITHER of you had any tax liability in 2006.
Pay the estimated tax in 2007 - otherwise you'll have a huge bill when you file next year. And if you file a joint return for 2007,and haven't filed estimated, you'd be penalized if either of you had tax liability for 2006.
2007-04-18 11:37:42 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
you do no longer incorporate your spouse's earnings and withholding, her taxes are coated you artwork on your individual earnings and particular the youngster supply you an further $3800 to cut back your taxable earnings, as nicely as new child tax credit additionally reducing your honestly earnings tax legal accountability
2016-12-26 13:28:35 · answer #4 · answered by harth 3 · 0⤊ 0⤋
Call a tax accountant and ask them. At least they can steer you in the right direction. Or you can always call the IRS they also give out free information.
Good Luck.
2007-04-18 07:18:12 · answer #5 · answered by devilgal031948 4 · 0⤊ 2⤋