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I am a full-time employee. My spouse is effectively employed long-term with one company, but has always been paid as an independent contractor.

If I plan on filing my 2018 taxes jointly with my spouse, but my spouse has not paid any estimated taxes during the year, is she likely to be on the hook for any penalties, etc., if my withholding was enough to cover our household combined tax bill?

Other notes: It may not be relevant, but my spouse is a green card holder.

Based on the IRS withholding calculator results, I expect to see a slight overpayment of my household's total federal income tax.

  • You will owe (as a couple) in addition to income tax on your combined income also self-employment (aka SECA, equals SocialSecurity + Medicare) tax of about 14% on her income; the link you give explicitly does not cover SE tax. You say she has 'long' been paid as contractor; were you not filing jointly before? Was she not a US tax resident in previous years? If your withholding+estimated isn't sufficient for 2018 but does cover your joint liability for 2017, there is a 'safe haven' from the form 2210 penalty. (SS/Med taxes are per individual, but all liability on a joint return is joint.) – dave_thompson_085 Jan 3 at 2:14
  • >>were you not filing jointly before? No, recently married. >>Was she not a US tax resident in previous years? She was, but filed on her own in previous years and did not keep meticulous records or important docs. – schadjo Jan 3 at 13:20
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    Okay, 2210 instructions say if newly joint to add your individual prior-year liabilities. Does she have her 2017 return, and you yours? If not normally you can get a 'return transcript' free online if you pass their security (many can't) or by mail, but these services appear affected by the current shutdown. As of now, 2018 1040ES is still current on the website (and when updated should be available under 'prior years'); you should now have data to make a near-perfect estimate, FWTW. Good luck. – dave_thompson_085 Jan 4 at 8:17
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If you are filing joint then the important thing is to have enough withheld by the combination of both spouses withholding and estimated payments. It doesn't matter how the payments are divided between the spouses the only thing that is important is the combination.

I do this every year. We both have W-2 jobs. I find it easier to adjust my withholding during the year if it is required. I just make sure that the result is that I make the numbers for the safe harbor.

When a person has both a W-2 job and a small amount of 1099 income the advice is to make sure the withholding for the W-2 job covers the taxes for the 1099 income.

The risk is that you can miscalculate, especially if the 4th quarter is very good.

  • That's what I figured. It didn't make much sense that the IRS would penalize my household if it's still paying its taxes, since money's money, but you never know... Thanks for the input. – schadjo Jan 1 at 0:35
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    If you miscalculate the withholding, you just need to send in an estimated tax form & payment for the 4th quarter. (Due Jan 15, IIRC.) It's not a problem (at least in my experience to date) if you don't make payments every quarter, especially if it's because your income varies unpredictably. – jamesqf Jan 1 at 4:26

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