Hello,

My husband and I filed jointly on our tax return. We have about $7K from self-employment and regular salaries from our regular jobs. We also sold our rental property and have a capital gain/profit from the sale of our property. We did not make our 2016 quarterly tax payments to the IRS but we've had our employers deducted our withholding taxes more than usual. Question: do we still need to make a tax payment (via Direct Payment or the IRS website) to the IRS before 12/31/16 Or is it too late by now? Please note when we do not have prior year's tax liability.

Thanks much.
Sup

My husband and I filed jointly on our tax return. We have about $7K from self-employment and regular salaries from our regular jobs. We also sold our rental property and have a capital gain/profit from the sale of our property. We did not make our 2016 quarterly tax payments to the IRS but we've had our employers deducted our withholding taxes more than usual. Question: do we still need to make a tax payment (via Direct Payment or the IRS website) to the IRS before 12/31/16 Or is it too late by now?=====>no if your ER withheld more than usual that may cover the amountof estimated taxes for the self employer income, then you do not need topay quarterly estiamted taxes); in general Unless your W2 income is/ exceeds $118500 for 2016, you need to pay both fica on your W2 income and seca taxes on your self employer income; aslngasthe amt on yur Sch C line 29/31 is$400 or erxceeds $400 then you must file your Sch C and and also aslongas the amt on your Sch SE line 2/3 is also $400 or exceeds $400, then you need to pay self employment taxes(SECA tax) . however, you can claim 50% of the seca tax on your 1040 line 27. but remember; you must pay quarterly estimated taxes ONLY when you expect to owe tax of $1,000 or more when your 2016 return is filed. plz read below.

Please note when we do not have prior year's tax liability. ============>You don?t have to pay estimated tax for the current year of 2016 if you meet all three of the following conditions; you had no tax liability for the prior yearof 2015;you were a U.S. citizen or resident for the whole year; your prior tax year covered a 12-month period

aas a side note; Just be careful that you aren't underpaying as a result. While you can count your federal income tax withholding in your estimated tax calculation, in some sense it was earmarked to pay taxes on yourW2 income, not your self-employment income. Federal withholding is considered paid equally throughout the year of 2016 regardless of when it is actually withheld and paid by the employer. You can choose to equally apply one fourth of the withholding to each quarterly estimated payment. for Example, say,
Total federal withholding is $6K /4 = $1.5K per quarter
Each quarterly payment can be reduced by this amount, so if you need to pay $2K as a quarterly pmt then, $2K-$1.5K=$500, you need to pay for each quarter aslongas $1.5K is equal/ exceeds your quarterly pmt for self employer income , then you do not need to pay quaretrly estiamted taxes for your self employer income but your ER still needs to withhold the whole amuntof $6K from your paycheks