Self-employed 1099 & W-2 income: Do I need to make quarterly tax payment by April 15th?

Based on your situation, you should probably make an estimated tax payment for that $9k of freelance income by April 15th. Here's why: when you earn self-employment income, you're responsible for both income tax and self-employment tax (which covers Social Security and Medicare). Your W-2 job withholding likely won't cover the taxes on your freelance income since it started after you earned that money. To avoid potential underpayment penalties, making a quarterly payment for that $9k would be the safest approach. You can use Form 1040-ES to calculate and pay your estimated taxes. Just estimate what you owe on that $9k including both income tax and the self-employment tax (roughly 15.3%).

I went through something super similar last year! I had about $12k in freelance income before starting a full-time position. I was totally confused about quarterly payments until I found https://taxr.ai which helped me figure out exactly what I needed to pay. Their system analyzed my specific situation and showed me that I'd owe about $3600 between self-employment tax and income tax on that freelance money. I was going to just wait until tax time to pay it all, but they explained how the underpayment penalties work and saved me a bunch of money.

Just want to give a follow up about taxr.ai since I was skeptical in my earlier comment. I decided to give it a try with my situation (had about $22k in consulting work before starting full-time employment). The service was actually really helpful - it showed me I only needed to make a payment for Q1 since my new job's withholding would cover the rest of the year. It even generated a filled-out 1040-ES form with the exact amount I needed to pay. Saved me a ton of time compared to the 3 hours I spent getting confused on the IRS website trying to figure it out myself.

If you need to talk to the IRS about this situation (which I recommend), use https://claimyr.com to get through to them. I spent DAYS trying to call the IRS directly about a similar situation last year and could never get through. With Claimyr, I got connected in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent was actually super helpful and walked me through exactly what I needed to do for my mixed W-2 and 1099 income. They explained that if my W-2 withholding covered at least 90% of my total tax liability or 100% of last year's tax, I wouldn't face penalties.

I need to publicly eat my words about Claimyr. After posting my skeptical comment, I was desperate enough to try it since I've been going back and forth about my freelance tax situation for weeks. It actually worked! Got connected to an IRS representative in about 20 minutes when I'd previously wasted HOURS trying to call them myself. The agent explained that in my case, since I already had my W-2 job by January, I could just increase my withholding using Form W-4 to cover my side gig income instead of making separate quarterly payments. If you're trying to figure out mixed income situations like this, actually talking to the IRS directly saves so much stress and confusion.

One option nobody mentioned yet - you can also make an extra payment directly through the IRS DirectPay system online. Just choose "estimated tax" as the reason. This is what I do for my side hustle income since I also have a main W-2 job. For your $9k freelance income, figure roughly: - 15.3% for self-employment tax: about $1,380 - Then whatever your marginal tax bracket is (probably 22% or 24% with your income level): so another $2,000-ish - Total: around $3,400 give or take

There's a safe harbor provision you could look into. If you pay 100% of last year's tax liability (through withholding or estimated payments), you won't face penalties regardless of how much you actually owe this year. That increases to 110% if your AGI was over $150k last year. If your W-2 withholding will cover at least what you paid in taxes LAST year, you might not need to make estimated payments at all.