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Suppose a couple made a one employed spouse and one self-employed spouse. Further suppose that the couple choose to file jointly.

Instead of having the self-employed spouse pay anticipated taxes of x$ quarterly, could the couple instead have the equivalent x$ retained from the employed spouse in the form of extra-withholding (provided the x$ are properly spread across the relevant months)?

Take aside what could happen if the couple split up before the end of the year or otherwise decided not to file jointly anymore. Also, suppose that the money that goes to taxes through the employed spouse's extra withdrawal over the course of the year is exactly identical to what the self-employed spouse would have paid otherwise (in the form of quarterly payments).

Are the two above options equivalent from a tax liability standpoint? In particular, could the extra-withholding option lead to penalties, interest, or other drawbacks the quarterly payment option would avoid?

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  • 1
    Should "withdrawal" in the last two paragraphs be "withholding"?
    – TripeHound
    Sep 9, 2023 at 6:27
  • @TripeHound: Looks like it.
    – keshlam
    Sep 9, 2023 at 12:50
  • 1
    Yes, sorry about that, making a correction in a sec.
    – FZS
    Sep 9, 2023 at 20:23

1 Answer 1

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If you file jointly, it does not matter where the withholdings or estimated payments come from. When you file, they are counted together to determine if you have over- or under-paid your taxes as a couple.

The instructions for form 1040 say this explicitly with regard to estimated payments:

If you or your spouse paid separate estimated tax but you are now filing a joint return, add the amounts you each paid.

And implicitly with regard to withholdings (meaning it does not ask you to segregate the W2s by filer):

Add the amounts shown as federal income tax withheld on your Form(s) W-2. Enter the total on line 25a. The amount withheld should be shown in box 2 of Form W-2. Attach your Form(s) W-2 to your return.

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