So I have both a W2 job and a 1099 side gig. My 1099 gig told me I need to make quarterly tax payments using the 1040-ES, and the next one is due soon on Jan 15th.
I started this job in October and made $2k so far, but the platform that paid me won’t send the 1099 until Jan 31st. How do I go about making the 1040 payment before I even get the 1099? Is there a way to do this online? I usually use FreeTaxUSA for filing my taxes in April, but this is my first time dealing with 1099 income, and I’m not sure how it works.
Also, how do I handle write-offs for this side job?
Even with a 1099, you only file your actual tax return once a year, just like with a W2 job.
The quarterly thing is just for making tax payments, not filing. You can make those payments online without any form. If you prefer mailing it in, you can use the 1040-ES voucher to direct the payment correctly.
You don’t need to wait for the 1099 form to estimate your taxes. Just use your own records to figure out how much you earned.
@Farley
Got it. Probably a dumb question, but let’s say I earned $30k from my W2 job and $2k from my 1099 gig before Jan 15th, and I make the tax payment now. Between Jan 15th and April 15th, if I earn $20k from my W2 and $3k from my 1099, do I only pay for what I earned before Jan 15th? How does it work?
Tru said: @Farley
Thanks. Last question… on April 15, do you have to pay twice? Once for filing taxes and again for the 1040 payment? Or just one payment?
Yes, there are two separate payments due on April 15. One for any tax you still owe from last year, and one as the first estimated payment for this year.
Tru said: @Farley
Thanks. Last question… on April 15, do you have to pay twice? Once for filing taxes and again for the 1040 payment? Or just one payment?
Just to clarify: On April 15, you’ll file your tax return for 2024, which shows how much tax you owed last year and compares it to what you already paid through W2 withholdings and quarterly payments. If you didn’t pay enough, you’ll send a check for the difference. If you overpaid, you’ll get a refund.
You’ll also need to make your first estimated payment for 2025. That’s why there are two payments due on April 15.
One thing to add—another way to handle your 1099 tax liability is by increasing your W2 withholdings at work. You can submit a new W4 to your payroll department and have them withhold extra. The benefit here is that withholding is always considered on time, so you avoid penalties as long as enough is withheld by year-end. Quarterly payments, on the other hand, need to be made by specific dates.
With this method, you can track your tax liability during the year, and if you’re a bit short, just make up the difference with an estimated payment.
By the way, there’s no such thing as a ‘1099 employer.’ You’re considered self-employed, meaning you’re running your own business. The company paying you is just a client.
Regarding write-offs, qualifying expenses go on Schedule C, which is part of your tax return. These are expenses that are ordinary and necessary for your self-employment work. Here’s a link to Schedule C info.
FreeTaxUSA has a business section that walks you through Schedule C, so you can stick with that if you’re comfortable.
@Jesse
Thanks for the detailed response. I can change my withholding through my W2 job (both federal and state). Right now, it’s set to zero for ‘other income,’ but I expect to earn around $10k total from 1099 work, interest, and dividends this year.
So if I now update it to $10k or maybe $12k to be safe, would that cover me?
@Tru
Yep, that’s the idea. Your employer will withhold more from each paycheck going forward.
Just make sure your withholdings and any estimated payments you make cover enough to avoid underpayment penalties. You can check the IRS ‘Avoid a penalty’ thresholds here:
@Jesse
Got it. Since I just changed my withholding now, and the next quarterly payment is due soon on Jan 15, will this timing cause any issues? Or will my W2 job withhold enough this week to make up for it?
@Tru
Each paycheck works independently. It won’t try to play catch-up based on past income. It just looks at your current settings and assumes that’s how it’ll be for the rest of the year.
If you want to catch up quickly, you could add a specific extra dollar amount to withhold from each paycheck.