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Tax withholding question with new job

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  • Tax withholding question with new job

    My wife and I's job situation will be changing in July and I want to make sure we are planning to do taxes the right way. We are both physicians but are working part time. I have a part time W2 job and a part time independent contracting gig paid via 1099. She will also have a separate part time IC job paid as a 1099. Both of us are separately planning to have sole proprieterships for our 1099 income. Incomes for each of these gigs are hard to predict but probably relatively equal. From what I have tried to read it seems like we can try to either do quarterly estimated payments for our 1099 jobs or have my W2 job withhold taxes for all of our jobs. To make things simple, lets say each job pays about 100K (the W2 and each IC gig). When I have tried to run the numbers, it seems like basically all of my W2 income would be withheld for taxes. Is this generally the easiest way to go about doing this for our situation? I have always done our taxes, but is this something I should probably start seeking a tax professional's help with? I just want to make sure I don't do anything wrong and incur some penalty (it seems like since this year will have a higher income we shouldn't get into trouble from the safe harbor rule). Thanks for any input!

  • #2
    As long as you are meeting a safe harbor then you'll be in good shape. W2 withholding is easiest if you don't have much 1099 income but if you are going to have a lot more 1099 income than W2 income then you may run into cash flow issues depending on when the income is coming in. This is a tax issue but there is a significant personal finance component that may come into play depending on your specific situation.