I have a full time job with a W-2. I also have a side hustle. For the revenue i earn from my side hustle, i compute estimated taxes and pay them as per the schedule.
Now, i am going to add a mortgage and college tuition payments to the mix.I know both are tax deductible. The question is - can i subtract them when i am computing my estimated taxes? I don't want to put additional deductions on my W-2. Instead every quarter, when i compute estimated taxes for my side hustle, i want to deduct for mortgage interest, taxes and tuition. Is that acceptable?
Hey @KP-V2 - welcome to QB Community. It's great to have you here!
It's always your best bet to consult with a certified tax professional in your state, but we do have plenty of folks on QB Community who can offer some guidance as well (@lynda? @Peter_G_Stone?).
In the meantime, wow - it sounds like you've got a lot on your plate! You're smart to be paying estimated quarterly taxes. What's your side hustle, and how are you tracking and managing your revenue there?
Hi @KP-V2, great questions! First, mortgage interest and student loan interest are only applicable if you are itemizing deductions on your tax return. Obviously, changes to the tax law were significant, so if you itemized in the past it does not mean you will be able to do so this year, as the standard deduction is increasing almost two-fold! That is point #1 and probably the most important.
Second, what is your side hustle? More importantly, how lucrative is it? This would have a large effect on your quarterly estimates. Unless you WANT to give Uncle Sam an interest free loan, make sure your estimates are necessary. If you have large withholdings from your salary/wages, they may cover your SE Tax at the end of they year and make quarterly payments inappropriate for your situation.
Lastly, talk to a tax expert! These forums are great, but it is very difficult to give concrete advice without more specifics. Best of luck to you with your side-gig!!