I'm thinking of taking a PT job that will issue me a 1099 for the 2008 tax year. The 1099 will be for $25,000. I will be filing jointly with my husband and combined we will make about $65,000 of taxable income (which includes the $25,000 from the 1099). We have 3 small children and an adoption tax credit carried over from last year of about $8,000. What percentage of the $25,000 should I plan on holding over for taxes next year?

Thank you in advance!!


~Nicole in Oregon

MukatA

There is a very simple rule that you can apply if you expect that your taxes in the year 2008 will be more than your taxes in 2007. Make estimated tax payments so that you pay 100% tax for 2007.
If you want to pay more, it is your own choice. As long as you pay equal to 100% of your taxes in 2006, there won't be any estimated tax penalty.