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Thread: Sorry, more tax questions.

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    Senior Member Tonya's Avatar
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    Default Sorry, more tax questions.

    I'm not dancing right now but will be getting back to it soon. I have a day job and have already filed w-2s for that. I'm plan on keeping my day job while dancing.

    When I start filing quarterly taxes should I take into account the income and withholdings from my day job, or should that be kept completely separate?

    I plan to start dancing before April 15. Does it matter that I've already filed my w-2s this year when doing quarterly taxes?

    Does anyone recommend turbo tax or any other software to help keep track of all of this throughout the year?

    Thanks

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    Banned Melonie's Avatar
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    Default Re: Sorry, more tax questions.

    When you're working as an 'employee' at your day job, your employer is already withholding taxes from your paychecks and sending it to the IRS on your behalf. Therefore the estimated tax payments you'll need to make should be based only on your dancing income. However, be aware that your tax bracket is determined by the sum of these two incomes, so to accurately estimate your taxes to pay estimateds you'll need to figure based on your total income, then subtract the amount of taxes that your 'employer' has already withheld from your day job paychecks during that period.

    If you need to, you can send in an April 15th 2005 estimated tax payment separately from your 2004 tax return. The tax return has an entry line for making an estimated tax payment (or transferring part of your tax refund to pay estimated taxes), but you can also send in a separate estimated tax payment form.

    I've been using TurboTax for many years. It is undoubtedly a good program. The version you'll need is TurboTax Premier, which has capabilities to handle Schedule C. I'm told that the IRS website also has a link where you can use TurboTax for free (but without the help functions) - however I don't have details about how to do this.

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    Senior Member Tonya's Avatar
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    Default Re: Sorry, more tax questions.

    Thanks Melonie. I thought it would be harder doing estimated taxes from dancing, considering my income from my day job. I'm less confused.

    I've already used Turbo Tax online for free to do my w-2s this year. Irs.gov has a bunch of websites listed where you can file your federal taxes for free, but most charge if you include your state taxes.

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    Banned Melonie's Avatar
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    Default Re: Sorry, more tax questions.

    Thanks Melonie. I thought it would be harder doing estimated taxes from dancing, considering my income from my day job. I'm less confused.
    Yup! Also keep in mind that your W2 'employer' is not aware of your dancing income, thus your paycheck tax withholding is probably inadequate to cover the income taxes actually due on your paycheck income (because of your combined income kicking your paycheck income into a higher tax bracket), let alone the taxes due on your dancing income. You have the option to either adjust your employer's paycheck tax withholding amounts to reflect your new higher tax bracket, or send extra money with your quarterly estimated tax payments to not only cover the taxes due on your dancing income but the extra taxes due on your paycheck income.

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