Here is a link to form 1040-ES for those who have to pay estimated
Since you were not self-employed in 2006, you cannot estimate based
on last year, so ignore that part. A lot depends on your filing
status (married joint, married separate, single etc) and, if you are
married, how much your spouse makes.
You can (along with most) probably ignore the alternative minimum
tax part. I didn’t have the time to fully look over the sheet, but if
you have specific questions on line items, feel free to email again.
Recently I have met with a new accountant and we are trying to
figure things out but I would like input from others who have had
more experienced in being self employed.
You didn’t mention if your accountant is new as in newly graduated
or new as in new to you?
Basically, the idea is to arrive at a gross income number. From
there, take all of you deductions and exemptions out. From there
divide by the number of pay periods in the year to get to a weekly
amount. From there, multiply by the number of weeks in the quarter to
arrive at estimated tax due.
One important point, if your 32 hour/week job is now or is willing
to issue a w-4 for you and take the appropriate amounts out of your
pay, you can have him/her deduct a bit extra to cover what is due on
your 8 hour/week job. From what you say above, it appears you are a
complete independent contractor. Please don’t take this the wrong
way, but this is not the best situation for you to be in from the tax
standpoint (more work) from the insurance standpoint (as in there
isn’t any) and probably a lot more. My father was a new independent
contractor 5 years ago in construction. He had a stroke on the job.
No insurance meant that today, he has nothing. As his daughter, it
was difficult to get him adequate treatment because the doctors knew
his status and I was the one who got all the collection calls. I am
sorry to be so opinionated about this issue, but I cannot, in good
faith, not mention it. I would not be anyone’s 32 hour/week
independent contractor knowing what I know today. In my mind, it is
tantamount to forced labor because a lot of independent contractors
do not make enough to afford adequate health insurance.
Another point, if your 32 hour employer does have you on a w-4
already, you probably don’t have to pay/file estimated tax because
your tax liability from earnings from self-employment will not be
more than 1000 dollars for the year
I know it sounds awful and frustrating. Sorry for that. One thing to
note, I saw a few self-employed peoples’ returns when I worked at a
A firm. They didn’t seem to worry very much about timely filing. I
can’t recommend ignoring the issue, just saying that some folks just
wait until the end of the year. The time and cost of paying the
accountant to figure the estimates and what-not may be higher then
the penalty for late payment. Please, everyone don’t get up-in-arms
about this point. I’m just stating what I observed some people doing.