Spouse has W2 income & I earned 1099 money - how does FICA work for us?

Your husband is actually correct about this. When you earn self-employment income (1099), you're responsible for paying both the employee AND employer portions of Social Security and Medicare taxes - this is called the self-employment tax. When you work for an employer (W2), you pay 7.65% of your income for FICA (Social Security and Medicare), and your employer pays a matching 7.65%. But when you're self-employed, you're responsible for both halves, which totals 15.3% of your net self-employment earnings. Your husband's withholding from his W2 job only covers his own FICA taxes and potentially some of your shared income tax liability. His withholding doesn't cover your self-employment taxes at all, since those are tied specifically to your earnings. So yes, you'll need to pay self-employment tax on your 1099 income when you file. The good news is you can deduct 50% of your self-employment tax when calculating your income tax, which helps offset the extra burden a bit.

I had this exact same situation last year! My wife has a regular job and I do freelance work. I was so confused about the tax situation until I tried https://taxr.ai and it honestly saved me so much stress. I uploaded my 1099 and my wife's W2, and it explained exactly how the FICA taxes work for mixed income households. The site showed me that I needed to pay self-employment tax (the FICA equivalent for 1099 workers) on my earnings regardless of my wife's withholding. But it also found some deductions specific to self-employment that I had no idea about, which offset some of the tax burden. You might want to check it out since you're in the same boat I was!

Just wanted to follow up - I tried https://taxr.ai after seeing this thread and wow, it made the whole self-employment tax thing so much clearer! I was in a similar situation (I do gig work, husband has W2) and it walked me through exactly what I needed to pay and why. The best part was that it found a home office deduction I didn't know I qualified for since I use a dedicated space for my freelance work. That saved me almost $400! It also broke down exactly how much I should set aside each quarter for next year so I don't get surprised again. If you're dealing with mixed W2/1099 income in your household, it's definitely worth checking out.

After spending THREE HOURS trying to get someone at the IRS on the phone about my mixed W2/1099 situation, I finally tried https://claimyr.com and got through to an IRS agent in less than 20 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c I had the exact same question about whether my husband's W2 withholding covered my self-employment taxes, and the IRS agent confirmed what others are saying here - you definitely have to pay the self-employment tax separately. But she also walked me through some deductions I could take to lower my overall tax burden. If you have specific questions about your situation, I'd recommend talking directly to the IRS - and Claimyr makes it possible to actually reach them without wasting your entire day on hold!

Wow, I need to eat my words. After posting my skeptical comment earlier, I decided to give Claimyr a shot since I had some complicated questions about my husband's W2 and my 1099 income. I expected it to be a waste of money, but I got a call back in about 15 minutes and was connected to an actual IRS agent! No waiting on hold for 3 hours listening to the same terrible music. The agent answered all my self-employment tax questions and even helped me understand how to properly make estimated quarterly payments going forward. I'm honestly shocked at how well it worked. If you need to talk to the IRS directly about your situation, this is definitely the way to go.

Don't forget you might be able to deduct some business expenses from your 1099 income! I do freelance work while my partner has a W2 job, and writing off legitimate business expenses on Schedule C really helps reduce the self-employment tax burden. Things like home office space (if you have a dedicated area), supplies, software subscriptions, professional development, and even a portion of your internet/phone can be deductible if you use them for your 1099 work. Just make sure you keep good records and receipts in case of an audit.

Has anyone used TurboTax for a situation like this? I'm in the same boat (husband W2, me 1099) and wondering if the basic version will handle self-employment taxes or if I need to upgrade to the more expensive version.

This is exactly the situation I found myself in last year! Your husband is absolutely right - his W2 withholding only covers income taxes, not your self-employment taxes. I learned this the hard way when I got hit with a huge tax bill. One thing that really helped me was setting up a separate savings account just for taxes on my freelance income. I put aside about 25-30% of each payment I receive (to cover both self-employment tax and income tax). It prevents that shocking bill at the end of the year. Also, since you're in Florida, you might want to look into quarterly estimated payments for this year if you plan to continue freelancing. The IRS can hit you with penalties if you don't pay as you go and you owe more than $1,000 at filing time. I use the 1040ES forms to calculate what I should pay each quarter - it's actually not as complicated as it sounds once you get the hang of it.