wife is self employed, quarterly tax payments?

Hello all,

I'm currently employed as a fulltime employee and have been for a while. My wife just started doing some independent contractor work and will make about half of my pay.

Do I need to start paying quarterly tax payments for this quarter for her, i.e. by April 15th?

How can I figure out if I'm having enough taxes taken out of my paycheck alone to avoid paying quarterly tax payments for her?

thanks.

If she's an independent contractor she's considered self-employed and yup, she will need to make estimated tax payments quarterly, and the first 2008 deadline is April 15.

There's an estimated tax worksheet in Form 1040-ES that you can use to figure out what her quarterly payments should be.

Jiggaman,

It is good that your wife is self employed.
She should set aside about 35% of her gross receipts for taxes.
This would include income tax, SS and Medicare taxes (self employed must pay 15.3%) and state income tax.

If 2008 is the the first year of the business it may not be necessary to make the quarterly payments. But she still owes the tax. Most likely she will need to make quarterly payments in the second year of businss.

As a full time employee, and assuming you file Married Filing Jointly, you could increase your withholding to cover your wife's tax liability. The IRS does not care who paid the tax, just so there is enough to cover the tax liability.

Also, there are 3 safe harbors that can prevent a tax payer from making estimated payments:
1) Your withholding plus credits will leave you owing no more than $999.
2) Your withholding plus credits will be 90% of the tax shown on your return.
3) Your withholding plus credits will equal the previous years tax owed.

If you miss all of these requirements, then you must make estimated payments by the required due dates.

For more detailed information see IRS PUB 505, Tax Withholding and Estimated Tax.

Wow, thanks for the quick replies. I'll look into the info provided.