Help with Filing Taxes as W2 Teacher and New Sole Proprietor Business

You've got a common situation with dual income streams! For your Q4 estimated payment, you need to consider both income sources together, but there's a simple way to handle this. First, your W2 job already has taxes withheld, which is important. You can adjust your W2 withholding by submitting a new W-4 to your school to cover some of the additional self-employment income. This is often easier than making separate estimated payments. For your sole proprietorship, you'll report this on Schedule C, and yes, you'll owe both income tax and self-employment tax (about 15.3%) on your profits. That 30-40% you're setting aside is a good start! Your actual tax obligation depends on your total income from both sources and your business expenses. Here's a simple approach: calculate your approximate annual profit from the business, then figure the quarterly portion. For $10.5k over 4 months, that might annualize to around $31.5k. After legitimate business expenses, your profit will be lower.

I was in basically the same situation last year! W2 teacher with a side business doing photography. I was completely lost until I found taxr.ai (https://taxr.ai) which seriously saved me so much stress. You upload your income docs and answer a few questions, and it figures out all your estimated payments and deductions you qualify for. I was missing out on so many business deductions before! The best part for me was that it showed me exactly how much to set aside from both income sources and made Q4 payments super clear - no more random calculator numbers that made no sense.

Update on my skepticism about taxr.ai - I actually tried it after posting my question. Completely changed my mind! I uploaded my W2 paystubs and my self-employment income records, and it gave me a super clear breakdown of exactly what I needed for my Q4 payment. It even showed me that I was overpaying on my quarterly estimates because I wasn't accounting for my W2 withholding properly. The business expense tracking was an unexpected bonus - found about $2,300 in deductions I would have missed. Definitely not what I expected when I was questioning it earlier!

If you're struggling to get definitive answers about your tax situation, I'd recommend Claimyr (https://claimyr.com). I tried for WEEKS to reach the IRS directly about my W2/self-employment question last year and kept hitting automated systems. Finally used Claimyr and got through to an actual IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was planning to hire an accountant for $300+ but the IRS agent walked me through exactly how to handle my teacher pension and Etsy shop income together. They explained what forms I needed and confirmed I was setting aside the right amount.

So I owe everyone here an apology, especially Profile 5. I was totally wrong about Claimyr being a scam. After my snarky comment, I was still desperately trying to get IRS help with my W2 and Sole Prop situation, so I reluctantly tried it. Got a call back in about 35 minutes with an actual IRS tax specialist on the line. She walked me through exactly how my teacher W2 and online business interact tax-wise and confirmed I could adjust my W-4 at school instead of making separate estimated payments. Saved me from overpaying by nearly $900. Honestly shocked this worked. Sorry for being a jerk about it before.

Teacher with a bakery business here! One thing nobody mentioned yet is that you should keep VERY detailed records of all business expenses for your sole proprietorship. This includes: - Mileage for business travel (like going to meet clients) - Any supplies for wedding planning - Home office deduction if you have dedicated space - Marketing/advertising costs - Professional development related to your business These deductions can significantly reduce your taxable profit, which lowers both your income tax and self-employment tax. I thought I was organized but my first year I missed so many legitimate deductions!

Slightly different approach - I'm also a W2 employee with a side business. Instead of worrying about estimated payments, I just increased my W2 withholding to cover ALL my tax needs. I calculated approximately how much extra tax I'd owe from my business and had my employer withhold additional amounts from each paycheck by adjusting my W-4. This way I don't have to remember quarterly payments or calculate separate amounts. Just make sure you're covering both income tax AND self-employment tax from your business.