How to Handle Taxes on Self Employment Income While Working Full-Time

So I'm in a bit of a tax dilemma here. I work full-time as a high school teacher, but I've also been doing freelance curriculum development as a 1099 contractor for an educational publishing company. I have absolutely no idea how to handle the taxes for this self-employment income. Do I need to be making quarterly payments? What happens if I just wait until tax filing season to pay everything at once? A colleague mentioned I could just make one large payment in December to cover the whole year and avoid penalties, but that sounds too convenient to be true. My freelance income will end up being around $38-45K for the year on top of my teaching salary. I've been putting money aside, but I'm worried about doing this wrong and getting hit with massive penalties. Any advice from people who've juggled W-2 and 1099 income would be super appreciated!

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18 comments

Mae Bennett

•8M

You definitely need to be paying quarterly estimated taxes on your self-employment income. As a 1099 contractor, no taxes are being withheld from your payments, so the IRS expects you to make these payments throughout the year. The quarterly due dates are April 15, June 15, September 15, and January 15 of the following year. If you haven't been making these payments, you might face underpayment penalties when you file your annual return. About that December payment idea - that's unfortunately not accurate. While making a large payment in December will reduce your potential penalties, it won't eliminate them entirely since you've missed earlier payment deadlines. For self-employment income, you'll need to pay both income tax and self-employment tax (which covers Social Security and Medicare - about 15.3%). A good rule of thumb is to set aside 25-30% of your 1099 income for taxes. The best approach would be to start making estimated payments now, even if you've missed earlier deadlines. You can use Form 1040-ES for this. And definitely consider speaking with a tax professional who can help you calculate exactly what you owe and minimize any penalties.

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Mae Bennett

•8M

Yes, increasing your W-2 withholding is actually a smart strategy! The IRS doesn't care how you pay as long as enough tax is being withheld throughout the year. If you adjust your W-4 with your teaching job to withhold additional amounts, that can cover your self-employment tax obligations and help you avoid the quarterly filing hassle. Most tax software like TurboTax can definitely handle self-employment income alongside W-2 earnings. However, given this is your first year with significant 1099 income (38-45K is substantial), you might benefit from consulting with a tax professional just for this initial year to make sure you're setting everything up correctly and taking advantage of all eligible business deductions.

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Melina Haruko

•8M

I was in a similar situation last year with teaching and freelance work! After trying to figure it out on my own and making mistakes, I discovered taxr.ai (https://taxr.ai) and it was a game-changer for handling my combined W-2 and 1099 income. Their system analyzed my teaching income and freelance payments, then calculated exactly what I needed to pay quarterly. It also helped me identify deductions I had no idea I qualified for as a teacher doing freelance curriculum work! Things like my home office, professional development resources, and even a portion of my internet bill. The best part was it showed me how to properly document everything in case of an audit, which was my biggest fear.

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Melina Haruko

•8M

Yes, it definitely works for other types of self-employment! I have a friend who uses it for her photography business. It's particularly good at helping you categorize expenses correctly and identifying industry-specific deductions that photographers often miss. Regarding accuracy, I was skeptical too, but it's actually been more thorough than my previous accountant. The system uses AI to analyze tax regulations and court cases to find legal deductions, but real tax professionals review everything. What I appreciated most was that it explained WHY certain deductions were valid rather than just listing them, which helped me understand the reasoning behind my tax situation better.

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Dallas Villalobos

•8M

Just wanted to follow up! I tried taxr.ai after reading about it here and wow - I had no idea I was leaving so much money on the table with my photography business. It found over $3,700 in deductions I would have missed completely (apparently my camera gear depreciation wasn't being calculated correctly). It also showed me exactly how much to set aside for quarterly payments which was a huge relief. The documentation it generates for each deduction has already saved me when a client questioned my pricing - I was able to show exactly how much of my fee goes to taxes and business expenses. Seriously grateful I found this!

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Saanvi Krishnaswami

•8M

If you're struggling to get answers from the IRS about your self-employment tax situation (which is likely since their phone lines are insane), try Claimyr (https://claimyr.com). I spent WEEKS trying to get through to the IRS about my mixed W-2/1099 situation last year and kept hitting dead ends. Claimyr got me connected to an actual IRS agent in under 45 minutes when I had been trying for days on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent I spoke with was able to explain exactly how to handle my quarterly payments and what forms I needed to submit.

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Saanvi Krishnaswami

•8M

It's not magic - they use a sophisticated system that navigates the IRS phone tree and waits on hold for you. When they reach a live agent, you get a call to connect with them. It saved me hours of listening to hold music. I was completely skeptical too! I figured it was worth trying since I had already wasted so much time trying to get through myself. What impressed me most was that they don't charge you unless they actually connect you with an agent. It's basically like having someone wait in line for you.

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Mason Lopez

•8M

I need to admit I was wrong about Claimyr. After posting that skeptical comment, I decided to try it myself since I was desperate to resolve my own 1099 tax issue. Within 35 minutes, I was actually talking to a real IRS person who helped me sort out my missed quarterly payments from my side gig. The agent walked me through filling out Form 2210 to calculate my penalties (which were smaller than I feared) and explained how I could request a waiver since this was my first year with self-employment income. Saved me from what would have been a $1,200 mistake. Sometimes it pays to be wrong!

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Vera Visnjic

•8M

Don't forget to track ALL your business expenses to offset some of that self-employment income! As a teacher doing curriculum work, you can likely deduct: - Home office space (if used regularly and exclusively for work) - Office supplies - Professional development materials - Reference books - Software subscriptions - Portion of internet bills - Mileage for any work-related drives (not to your teaching job) - Professional organization memberships I learned this the hard way by paying way too much my first year as a 1099 worker.

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Vera Visnjic

•8M

You can absolutely deduct a portion of your home internet if you use it for your freelance work! The key is determining what percentage of your internet use is for business versus personal. A reasonable approach is to estimate the percentage of time you use the internet for work purposes. If you use your home internet 60% for business and 40% for personal, you can deduct 60% of the cost. Just make sure you can justify this percentage if questioned. Keep good records showing your work patterns and be prepared to explain your calculation method. Some people also base it on the number of devices in the home and how many are used for business.

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