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sjones2
Level 1

Why would claiming married with 2 dependents vs single, head of household claiming none cause my estimated taxes in Quickbooks Self-Employed to increase?

So last year I got married and after doing my taxes (married filing jointly) I ultimately ended up paying the government too much money therefore I am getting a return.  In order to adjust for this for this year I adjusted my tax profile to reflect married, filing jointly, added my spouses income (W-2) and claiming two dependents which I thought would cause Quickbooks to reflect a decrease in estimated taxes but to my surprise it was the opposite.  It increased by almost $1000 per quarter.  Given I paid too much last year why would this be the case.  I of course want to do everything by the book but certainly don't want to just park thousands of dollars with the Federal government, dollars I could be using to pay down my own bills or help grow my business.  I also don't want to be penalized either though and I am looking for any insight anyone can offer here as to what the best practices/options are and why would claiming married with 2 dependents vs single and none actually cause me to owe more?  Also I received the estimated vouchers with what the government recommended I pay and the amount is significantly lower than what Quickbooks is reflecting so should I go off of that?  Confused on what is best here.
1 Comment 1
Mark_R
Moderator

Why would claiming married with 2 dependents vs single, head of household claiming none cause my estimated taxes in Quickbooks Self-Employed to increase?

Hi there, @sjones2.

 

Let me provide some insights about how QuickBooks Self-Employed calculate estimated tax payment and help you from there.

 

The possible reason why the estimated tax increase than expected is that self-employed people have to pay both halves of the Social Security and Medicare tax. In contrast, a W-2 employee (your spouse) only pays one half, and the employer pays the other half.

 

It also increases your estimated tax if your regular transactions and business logs had missing deductions.

 

Also, I highly recommend contacting TurboTax Customer Support. This way, they can provide some advice on how to properly set your head of household in QuickBooks Self-Employed.

 

You might want to check out these articles to know how estimated tax payments calculated and Head of Household set up:

 

Please touch base with me here for all of your QuickBooks needs, I'm always happy to help. Have a good one.

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