How do I estimate my taxes when I have only 1099 income?
"As long as you paid 100% of your last year's tax liability (overall tax liability, the total tax to pay on your 1040) or 90% of the total tax liability this year, or your underpayment is no more than $1000, you won't be penalized as long as you pay the difference by April 15th. That's per the IRS. I don't know where the ""10% of my income"" came from, I'm not aware of any such rule." So there are a lot of people that get into trouble in your type of self employment situation.  This is what I do, and I use google drive so there are no cost for tools.  However, having an accounting system is better. Getting in trouble with the IRS really sucks bad.
"(Insert the usual disclaimer that I'm not any sort of tax professional; I'm just a random guy on the Internet who occasionally looks through IRS instructions for fun. Then again, what you're doing here is asking random people on the Internet for help, so here goes.) The gigantic book of ""How to File Your Income Taxes"" from the IRS is called Publication 17. That's generally where I start to figure out where to report what. The section on Royalties has this to say: Royalties from copyrights, patents, and oil, gas, and mineral properties are taxable as ordinary income. In most cases, you report royalties in Part I of Schedule E (Form 1040). However, if you hold an operating oil, gas, or mineral interest or are in business as a self-employed writer, inventor, artist, etc., report your income and expenses on Schedule C or Schedule C-EZ (Form 1040).  It sounds like you are receiving royalties from a copyright, and not as a self-employed writer. That means that you would report the income on Schedule E, Part I. I've not used Schedule E before, but looking at the instructions for it, you enter this as ""Royalty Property"". For royalty property, enter code “6” on line 1b and leave lines 1a and 2 blank for that property. So, in Line 1b, part A, enter code 6. (It looks like you'll only use section A here as you only have one royalty property.) Then in column A, Line 4, enter the royalties you have received. The instructions confirm that this should be the amount that you received listed on the 1099-MISC. Report on line 4 royalties from oil, gas, or mineral properties (not including operating interests); copyrights; and patents. Use a separate column (A, B, or C) for each royalty property. If you received $10 or more in royalties during 2016, the payer should send you a Form 1099-MISC or similar statement by January 31, 2017, showing the amount you received. Report this amount on line 4.  I don't think that there's any relevant Expenses deductions you could take on the subsequent lines (though like I said, I've not used this form before), but if you had some specific expenses involved in producing this income it might be worth looking into further. On Line 21 you'd subtract the 0 expenses (or subtract any expenses you do manage to list) and put the total. It looks like there are more totals to accumulate on lines 23 and 24, which presumably would be equally easy as you only have the one property. Put the total again on line 26, which says to enter it on the main Form 1040 on line 17 and it thus gets included in your income." You're interpreting this correctly. Furthermore, if your total tax liability is less than $1000, you can not pay estimates at all, just pay at the tax day. See this safe harbor rule in the IRS publication 17: General rule.    In most cases, you must pay estimated tax for 2016 if   both of the following apply. You expect to owe at least $1,000 in tax for 2016, after subtracting your withholding and refundable credits. You expect your withholding plus your refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2016 tax return, or 100% of the tax shown on your 2015 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers , later).   Your 2015 tax return must cover all 12 months. 1040ES uses the smaller number because that's what triggers the penalties.  (That is, you are penalized if what you prepay is less than your total 2013 liability and less than 90% of your 2014 liability.)  However, estimated taxes are just estimates.  If you pay too little, you could face a penalty, but there's no penalty for paying too much -- you'll just get a refund as usual. It seems that your concern stems from the fact that this is the first year you're in this tax situation and so you're unsure if your estimates are accurate.  In your comment to Pete Belford's answer, you also indicated you aren't worried about being unable to pay, but only about accidentally underpaying. In this case, you could just err on the side of caution and pay more than 1040ES says you owe.  (You don't actually file the 1040ES, the calculations are just for your own use.)  For instance, you could prepay based on the higher of your two estimates, if you can afford it; or, if you can't afford that much, hedge the estimate payments up a bit to an amount you can afford that is closer to the higher estimate.  At the end of the year if you paid too much you can get a refund as usual.  After this year, you will presumably have a better sense of your income and your tax liability, and can make more accurate estimates for next year. I've given up on trying to understand how the allowances correspond to my number of dependents.   What I do instead to achieve the same end goal of having the right amount of money withheld is using a paycheck calculator. If I get paid 24 times a year (twice a month) and I figure I'm going to owe about $6,000 of taxes, then every paycheck needs to have $250 of federal tax withheld from it to make sure I am covered. Go to the paycheck calculator and play with the allowance numbers until you get $250 as the federal tax withheld and then submit a new W4 to your employer. This is the only reliable way I've found to figure this out on my own.  Because my calculations are done in dollars instead of exemptions, etc. and my taxes do not wildly fluctuate year-to-year this works well for me. From my blog's discussion on 2017 tax rates.  This is the final set of numbers. So, if you currently have, say $120K taxable income, every dollar above that starts getting taxed at 25%, until $153K, then 28%.  In other words, forecast your taxes based on the day job, but then the 1099 goes on top of that. Your calculations look correct in that they will be withholding taxes at the full year income rate even though you will only have 1/3 of that income which will put you in a lower tax bracket. There are online sites where you can fill out a return for free.  You can estimate your return by filling out a return using the numbers on your paystub (you will have to add in your last paystub manually). In regards to when you will get your refund check?  I believe it comes within a month or so of filing. You report each position separately. You do this on form 8949. 7 positions is nothing, it will take you 5 minutes. There's a tip on form 8949 that says this, though: For Part I (short term transactions):  Note. You may aggregate all short-term transactions reported on   Form(s) 1099-B showing basis was reported to the IRS and for which no   adjustments or codes are required. Enter the total directly on   Schedule D, line 1a; you are not required to report these transactions   on Form 8949 (see instructions). For Part II (long term transactions): Note. You may aggregate all long-term transactions reported on Form(s)   1099-B showing basis was reported to the IRS and for which no   adjustments or codes are required. Enter the total directly on   Schedule D, line 8a; you are not required to report these transactions   on Form 8949 (see instructions). If the 1099B in your case shows basis for each transaction as reported to the IRS - you're in luck, and don't have to type them all in separately. "If you're single, the only solution I'm aware of, assuming you are truly getting a 1099-misc and not a W-2 (and don't have a W-2 option available, like TAing), is to save in a nondeductible account for now. Then, when you later do have a job, use that nondeductible account (in part) to fund your retirement accounts.  Particularly the first few years (if you're a ""young"" grad student in particular), you'll probably be low enough on the income side that you can fit this in - in particular if you've got a 401k or 403b plan at work; make your from-salary contributions there, and make deductible IRA or Roth IRA contributions from your in-school savings. If you're not single, or even if you are single but have a child, you have a few other options. Spouses who don't have earned income, but have a spouse who does, can set up a Spousal IRA.  You can then, combined, save up to your spouse's total earned income (or the usual per-person maximums).  So if you are married and your wife/husband works, you can essentially count his/her earned income towards your earned income. Second, if you have a child, consider setting up a 529 plan for them.  You're probably going to want to do this anyway, right?  You can even do this for a niece or nephew, if you're feeling generous." My understanding (I've never filed one myself) is that the 1040ES is intended to allow you to file quarterly and report unpredictable income, and to pay estimated taxes on that income.   I was in the same sort of boat for 2016 -- I had a big unexpected income source in 2015, and this took away my Safe Harbor for 2016.  I adjusted my w-2 to zero exemptions (eventually) and will be getting a refund of about 1% of our income. So lets say you make 10000 in STG in March, and another 15000 in STG in April.  File a quarterly 1040-ES between March 31 and April 15.  Report the income, and pay some tax.  You should be able to calculate the STCG Tax for 10k pretty easily.  Just assume that it comes off the top and doesn't add at all to your deductions.  Then for April, do the same by June 15. Just like your W-2 is used to estimate how much your employer should withhold, the 1040ES is designed to estimate how much extra you need to pay to the IRS to avoid penalties.  It'll all get resolved after you file your final 1040 for the 2017 calendar year. "I have a related issue, since I have some income which is large enough to matter and hard to predict. Start with a best guess. Check what tax bracket you were in last year and withhold that percentage of the expected non-withheld income. Adjust upward a bit, if desired, to reflect the fact that you're getting paid more at the new job. Adjust again, either up or down, to reflect whether you were over-withheld or under-withheld last year (whether the IRS owed you a refund or you had to send a check with your return). Repeat that process next year after next tax season, when you see how well your guess worked out. (You could try pre-calculating the entire tax return based on your expected income and then divide any underpayment into per-paycheck additional withholding... but I don't think it's worth the effort.) I don't worry about trying to get this exactly correct. I don't stress about lost interest if I've over-withheld a bit, and as long as your withholding was reasonably close and you have the cash float available to send them a check for the rest when it comes due, the IRS generally doesn't grumble if your withholding was a bit low.  (It would be really nice if the IRS paid us interest on over-withholding, to mirror the fact that they charge us interest if we're late in returning our forms. Oh well.) Despite all the stories, the IRS really is fairly reasonable; if you aren't deliberately trying to get away with something, the process is annoying but shouldn't be scary. The one time they mail-audited me, it was several thousand dollars in my favor; I'd forgotten to claim some investment losses, and their computers noticed the error. Though I still say the motto of the next revolution will be ""No taxation without proper instructions!""" I believe it's not only legal, but correct and required. A 1099 is how a business reports payments to others, and they're required by the IRS to send them for payments of $600 or more (for miscalleneous payments like this). The payment is an expense to the landlord and income to you, and the 1099 is how that's documented (although note that if they don't send you a 1099, it's still income to you and you still need to report it as such). It's similar to getting a 1099-INT for interest payments or a 1099-DIV for dividend payments. You'll get a 1099-MISC for a miscellaneous payment. If you were an employee they'd send you a W-2, not a 1099. You are right that even if you do not receive a 1099-MISC, you still need to report all income to the IRS.  Report the $40 on Schedule C or Schedule C-EZ.  Since your net profit was less than $400, you do not need to file Schedule SE.  From the IRS web site: Self-Employment Income It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040. Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income. Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer. If you don't itemize your deductions, your state tax refund is not considered income to you. Even if you didn't receive the actual 1099-G, you know how much refund you got, so you can calculate if you need to add it back to your income this year using the worksheet on page 23 of the instructions. There are a few methods you can use to estimate your taxes. On the results screen, the app will show you your estimated tax burden, your estimated withholding for the year, and your estimated overpayment/refund or shortfall/tax due.  It may also have recommendations for you on how to adjust your W-4 (although, this late in the year, I think it only tells you to come back next year to reevaluate).   Your state might also have income tax, and if you are curious about that, you can find the state tax form and estimate your state income tax as well. My guess is that you will be getting a refund this year, as you have only worked half of the year.  But that is only a guess. "H.R. basically consults Publication 15 (this is the link to 2015) to determine how much to hold, based on filing status, exemptions, and pay amount. What's described here is a form of estimation, or, in other words, H.R. withholds what would be your actual taxes, dividing across the number of paychecks you receive. Assuming your gross pay and exemptions do not change, this usually results in a zero-sum for taxes owed (you will receive nothing, and owe nothing). As you can see from the charts, the year is basically broken down into equal tax units that reflect how much you would owe if you worked at that bracket all year. This estimation works best when you have steady hours from check to check. In other words, your taxes are based on the estimate of what you'd make if you earned that much all year, scaled down to the time frame (e.g. 1/52 if you are paid weekly, or 1/26 if you paid biweekly). They do not go ""up"" near the end of the year, because they're estimated in advance. You don't move up a tax bracket, but are instead taxed at a particular bracket every paycheck. There's also other forms of estimation mentioned there, but basically follow the same scheme. Note that all estimation forms are just that-- estimates. It's best to use a calculator and compare your current taxes whenever a significant change occurs-- a raise, a new child, getting married or divorced, etc. You'll want to be able to alter your exemptions so that enough taxes are coming out. That's also the reason for the ""withhold extra"" box, so that you can avoid owing. For example, if you're making $44 a week for the first 26 weeks, and then you make $764 a week for the second 26 weeks of the year, you'll end up with an actual tax liability of $2,576.6, but end up paying only $2,345.20. You would owe $231.40. Of course, the actual math is a lot more complicated if you're an employee paid by the minute, for example, or you have a child, go to college, etc. Paychecks that vary wildly, like $10,000 one week and $2,000 the next tend to have the hardest-to-predict estimates (e.g. jobs with big commission payouts). You should avoid living check-to-check with jobs that pay this way, because you'll probably end up owing taxes. Conversely, if you've done your estimates right and you're paid salary or exactly the same number of hours every week, you'll find that the taxes are much easier to predict and you can usually easily create a refund situation simply by having the correct exemptions on your check. So, in summation, if your check falls in the 25% category (which is, of course, 25% above the tax bracket break point), you're already paying the correct amount, and no further drop in your check would be expected."