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Moving in June to new state. Spouse is an IC. How to handle quarterly estimated tax?

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  • Moving in June to new state. Spouse is an IC. How to handle quarterly estimated tax?

    Spouse will be making ~50k in first 5 months of year in State #1. Probably wont have a 1099 job in State #2. Thus, do we still spread out all 4 quarters of estimated taxes for State 1 using only the 50K income? Since all of this income is from State #1, I am assuming we wouldnt have to do any estimated taxes for State #2 right? Further, there is no role to just do estimated taxes for Q1 and Q2 to cover the entire liability of the 50k right?

  • #2
    estimated taxes are for the quarter you earned them in.

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    • #3
      I would just handle this through withholding and not make estimated payments

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      • #4
        Originally posted by jacoavlu View Post
        I would just handle this through withholding and not make estimated payments
        For federal that could work. But for state #1 might be harder since I don’t have as much time to do that, between now and June

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        • #5
          Originally posted by GastroMastro View Post

          For federal that could work. But for state #1 might be harder since I don’t have as much time to do that, between now and June
          It's just an accounting issue, right? You're still planning on paying the money so instead of making estimated payments out of her IC income have that money taken out of withholding. I'm assuming that you're W2 so maybe my assumptions are wrong.

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          • #6
            Originally posted by GastroMastro View Post

            For federal that could work. But for state #1 might be harder since I don’t have as much time to do that, between now and June
            your question can be precisely answered. You only have to meet the safe harbor amount. Do you know the safe harbor amount?

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            • #7
              Originally posted by GastroMastro View Post

              For federal that could work. But for state #1 might be harder since I don’t have as much time to do that, between now and June
              Is your question for state or federal?
              Federal safe harbor is independent of state. W-2 is the best way for federal.
              State is different. Clear up your state by the end of June.

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              • #8
                Originally posted by jacoavlu View Post

                your question can be precisely answered. You only have to meet the safe harbor amount. Do you know the safe harbor amount?
                That’s my total tax liability (for all jobs) for 2020 X 110% right? I can probably do that with my higher attending salary

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                • #9
                  Originally posted by GastroMastro View Post

                  That’s my total tax liability (for all jobs) for 2020 X 110% right?
                  maybe

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                  • #10
                    Originally posted by jacoavlu View Post

                    maybe
                    I don't understand...

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                    • #11
                      Originally posted by Tim View Post
                      Is your question for state or federal?
                      Federal safe harbor is independent of state. W-2 is the best way for federal.
                      State is different. Clear up your state by the end of June.
                      this is the most helpful. so i'll just pay Q1 and Q2 est taxes for State #1 (and NOT pay them anything Q3 Q4). and then just NOT do any federal estimated and just ensure I withhold 110% of my federal tax liability via my attending W2 job in the last 5-6 months of the year.

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                      • #12
                        Originally posted by GastroMastro View Post

                        I don't understand...
                        you have not provided enough information for anyone to determine your safe harbor

                        I would encourage you to learn about how the 110% number may or may not be your safe harbor number. And figure out your state rules.

                        It's not complex.

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                        • #13
                          • If you expect to owe less than $1,000 after subtracting your withholding, you’re safe.
                          • If you pay 100% of your tax liability for the previous year via estimated quarterly tax payments, you’re safe. If your adjusted gross income for the year is over $150,000 then it’s 110%.
                          • If you pay within 90% of your actual liability for the current year, you’re safe.

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                          • #14
                            Originally posted by GastroMastro View Post

                            this is the most helpful. so i'll just pay Q1 and Q2 est taxes for State #1 (and NOT pay them anything Q3 Q4). and then just NOT do any federal estimated and just ensure I withhold 110% of my federal tax liability via my attending W2 job in the last 5-6 months of the year.
                            Yes, this is what I would recommend. As long as you w/h the safe harbor fed, you can wait until April 2022 to pay any bal-due.
                            Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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