IRS Transcript Shows $1,719 Balance Due Despite $39,513 Income and $1,546 Withholding - Self-Employment Tax Included

The tax transcript shows your total tax liability of $3,524 ($3,254 regular tax plus $270 self-employment tax) based on your adjusted gross income of $39,513 and taxable income of $26,563. Your withholdings of $1,546 from W-2/1099 income weren't sufficient to cover this liability, resulting in the balance due. The math breaks down as: - Base tax liability: $3,254 - Self-employment tax: $270 (calculated from $1,764 of SE income) - Less withholdings: -$1,546 - Late payment penalty: $8.54 - Interest charges: $2.95 = Total balance due: $1,719.49 Since you filed as Single with one exemption and had self-employment income, you should have been making quarterly estimated tax payments throughout the year. The IRS expects you to pay taxes as you earn income, which is why you're seeing the late payment penalty and interest charges (transaction codes 276 and 196). The transcript shows this balance was current as of April 24, 2023 (the processing date), but notes that this isn't the final payoff amount as additional interest may continue to accrue. You'll want to address this balance soon to prevent additional penalties and interest from accumulating.

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same boat here! first year doing self employment and the tax hit was brutal 🤮

Pro tip: setup quarterly estimated payments thru IRS direct pay. its way easier than owing a big chunk at the end

Wait until you see how much self employment tax goes up when you make more lololol welcome to the club 🤡

This is why I always tell ppl to use a tax professional their first year of self employment. Its worth the money to get it setup right