As a self-employed individual, am I required to file quarterly?

I am aware that, unless my expected payment is less than $1,000, I usually do.

I would like to know if you plan to contribute the whole $23k to your 401(k) and the additional $7k to your IRA. My projected taxes would drop below $1,000 as a result (I’m claiming RE depreciation on commercial property).

Although I haven’t yet, I intend to contribute to my retirement fund before the year is out. Do I not have to make payments every quarter?

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However, since it’s a 401(k), it’s not subject to taxation.

My net income is so low due to numerous large deductions from real estate depreciation that I will likely pay less than $1,000 in 2024. Naturally, when I eventually sell the properties, I’ll need to consider that.

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Taxable income is not the basis for SE taxes; rather, net profit from business is what permits 401(k) contributions.

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Alright, so what distinguishes net income from taxable income? My sole source of income is my net income, which is subject to taxes.

Does this mean that I can’t deduct the retirement contribution from my gross income like I can other relevant deductions like company expenses?

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Your net profit is reported on Schedule C. Net profit is equal to gross receipts less company expenses.

Your SE taxes and allowed 401(k) contributions are calculated using that figure.

Your net profit is added to your overall income, which is then subtracted from other sources to determine your adjusted gross income (AGI).

Your taxable income is determined by deducting your Qualified Business Income Deduction from your AGI, as well as any standard or itemized deductions.

Your income taxes are calculated using that number.

Contributions made during retirement lower INCOME taxes but not SE taxes.

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I appreciate how you explained things so well. Makes perfect logic :hugs: :hugs:

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You have over $1000 in overdue SE taxes, which you must pay in estimates to prevent penalties.

In SE calculations, the 401K deduction is not meaningful.

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Alright, thank you for your response. Why does retirement deduction matter less? I believed that deducting (or deferring) your retirement payments was the main goal.

Make sure you don’t make more 401K contributions than you can use because self-employed medical insurance and half of the SE tax are deductions you might waste if you max out 401K. Retirement deductions have no bearing on SE calculations, so they seem to be the only taxes you would be paying.

The max 401k contribution would be (net income reduced by 1/2 SE tax). You’re correct, that they need to be careful when calculating their 401k contribution. It’s pretty serious to overcontribute.

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Exactly what I meant to say. What I meant to say was that their AGI might be very low even if they received the maximum 401K, half SE, and health insurance. If you use the standard deduction, they might not have any taxes, which means they squandered a lot of money on their 401(k).