Filing Taxes for Two Separate Jobs Being Worked at the Same Time?
"You file taxes as usual. W2 is a form given to you, you don't need to fill it. Similarly, 1099. Both report moneys paid to you by your employers. W2 is for actual employer (the one where you're on the payroll), 1099 is for contractors (where you invoice the entity you provide services to and get paid per contract). You need to look at form 1040 and its instructions as to how exactly to fill it. That would be the annual tax return. It has various schedules (A, B, C, D, E, F, H, etc) which you should familiarize yourself with, and various additional forms that you attach to it. If you're self employed, you're expected  to make quarterly estimate payments, but if you're a salaried employee you can instruct your employer to withhold the amounts you expect to owe for taxes from your salary, instead. If you're using a tax preparation software (like TurboTax or TaxAct), it will ""interview"" you to get all the needed information and provide you with the forms filled accordingly. Alternatively you can pay someone to prepare the tax return for you." Welcome to the wonderful but oft confusing world of self-employment. Your regular job will withhold income for you and give you a W2, which tells you and the government how much is withheld.  At the end of the year uber will give you and the government a 1099-misc, which will tell you how much they paid you, but nothing will be withheld, which means you will owe the government some taxes. When it comes to taxes, you will file a 1040 (the big one, not a 1040EZ nor 1040A).  In addition you will file a schedule C (self-employed income), where you will report the gross paid to you, deduct your expenses, and come up with your profit, which will be taxable.  That profit goes into a line in the 1040.   You need to file schedule SE.  This says how much self-employment tax you will pay on your 1099 income, and it will be more than you expect.  Self employment tax is SS/Medicare.  There's a line for this on the 1040 as well.  You can also deduct half of your self-employment tax on the 1040, there's a line for it. Now, you can pay quarterly taxes on your 1099 income by filing 1040-ES.  That avoids a penalty (which usually isn't that large) for not withholding enough.  As an alternative, you can have your regular W2 job withhold extra.  As long as you don't owe a bunch at tax time, you won't be a fined. When you are self-employed your taxes aren't as simple.  Sorry.  You can either spend some time becoming an expert by studying the instructions for the 1040, pay for the expensive version of tax programs, or hire someone to do it for you. Self-employed taxes are painful, but take advantage of the upsides as well.  You can start a solo 401(k) or SEP IRA, for example.  Make sure you are careful to deduct every relevant business expense and keep good records in case you get audited.
Per the IRS instructions on filing as Head of Household as a Citizen Living Abroad, if you choose to file only your own taxes, and you qualify for Head of Household without them, the IRS does not consider you married: If you are a U.S. citizen married to a nonresident alien you may qualify to use the head of household tax rates. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien. However, your spouse is not a qualifying person for head of household purposes. You must have another qualifying person and meet the other tests to be eligible to file as a head of household. As such, you could file as Married Filing Separately (if you have no children) or Head of Household (if you have one or more children, a parent, etc. for whom you paid more than half of their upkeep - see the document for more information).   You also may choose to file as Married Filing Jointly, if it benefits you to do so (it may, if she earns much less than you).  See the IRS document Nonresident Spouse Treated As Resident for more information.  If you choose to treat her as a resident, then you must declare her worldwide income.  In some circumstances this will be beneficial for you, if you earn substantially more than her and it lowers your tax rate overall to do so.  Married Filing Separately severely limits your ability to take some deductions and credits, so it's well worth seeing which is better. "I don't believe it makes a difference at the federal level -- if you file taxes jointly, gains, losses, and dividends appear on the joint tax account.  If you file separately, I assume the tax implications only appear on the owner's tax return.  Then the benefits might outweigh the costs, but only if you correctly predict market behavior and the behavior of your positions. For example, lets say you lose 30k in the market in one year, and your spouse makes 30k.  If you're filing jointly, the loss washes out the gain, and you have no net taxes on the investment.  If you're filing separately, you can claim 3k in loss (the remaining 27k in loss is banked to future tax years), but your spouse pays taxes on 30k in gain. Where things get more interesting is at the state level.  I live in a ""community property state,"" where it doesn't matter whether you have separate accounts or not.  If I use ""community money"" to purchase a stock and make a million bucks, that million bucks is shared by the two of us, whether the account is in my name our in our name.  income during the marriage is considered community property.  However property you bring into the marriage is not.  And inheritances are not community property -- until co-mingled. Not sure how it works in other states.  I grew up in what's called an ""equitable property state.""" As @littleadv's comment on your question said, it is unlikely that you and your husband paid a total of $5K in income tax on $185K of wages in 2013. More likely, your 2013 tax return (assumed to be a Married Filing Jointly tax return) showed that you had not arranged to have  enough tax withheld from your salaries and thus you still owed $5K  to the IRS for 2013 taxes. Most likely, that $5K sum included not just the unpaid amount of tax but also  penalties for not paying enough income tax during 2013 and interest on the amounts not paid on time.  Just to be clear, note that the income tax you paid for 2013 during 2013 is the total of all income tax withheld from your wages by your employers (plus any estimated tax payments that you might have made for 2013). If your 2014 tax return (that you will be filing by April 15, 2015)  will likely show a similar amount due for 2014 taxes, you can avoid  the penalties and interest by increasing  your income tax withholding by a substantial amount for the remainder of 2014. If you are paid monthly and have two paychecks still to be received, then having $2500 extra withheld from each paycheck will cover the $5K shortfall that you expect to have for 2014 taxes. I assume that this is what your husband intended you to do, and to do  this, you need to fill out a new W-4 Form (asking that an addiitonal  $2500 be withheld from each paycheck) and give this form to your employer soon (i.e. well before Payroll processes your next paycheck which usually happens a few days before you get the paycheck).  If you do so, your take-home pay will be reduced by $2500 on each of the next two monthly paychecks because your employer will withhold this extra amount from your pay and include it in the amount sent to the IRS as income tax withheld from your paycheck. After your last paycheck for 2014 has been received, you should submit a new W-4 Form to your asking for only $417 in extra income tax to be withheld from each paycheck starting January 1, 2015, so that  the expected $5K shortfall for 2015 is paid in 12 equal monthly installments. If you neglect to do this, your employer will continue to withhold $2500 extra as income tax, and you will get $2500 less in take-home pay month after month in 2015. This money will not disappear forever; come 2016 when you file your income tax return for 2015, you will receive a substantial refund because you overpaid income tax by a lot during 2015. You will not, however, receive any interest on the amount that the IRS is returning to you unless the IRS delays in sending you the refund for some reason.  Alternatively, you can file a new W-4 asking for no additional tax to be withheld from 2015 paychecks, and a year from now, go through the same exercise as above: have $2500 extra withheld from the last two paychecks for 2015, right when the holidays are coming and people are shopping for gifts. "My tax preparing agent is suggesting that since the stock brokers in   India does not have any US state ITINS, it becomes complicated to file   that income along with US taxes Why? Nothing to do with each other. You need to have ITIN (or, SSN more likely, since you're on H1b). What brokers have have nothing to do with you. You must report these gains on your US tax return, and beware of the PFIC rules when you do it. He says, I can file those taxes separately in India. You file Indian tax return in India, but it has nothing to do with the US. You'll have to deal with the tax treaty/foreign tax credits to co-ordinate. How complicated is it to include Indian capital gains along with US   taxes? ""How complicated"" is really irrelevant. But in any case - there's no difference between Indian capital gains and American capital gains, unless PFIC/Trusts/Mutual funds are involved. Then it becomes complicated, but being complicated is not enough to not report it. If PIFC/Trusts/Mutual funds aren't involved, you just report this on Schedule D as usual. Did anybody face similar situation More or less every American living abroad. Also the financial years are different in India and US Irrelevant." "Your comment to James is telling and can help us lead you in the right direction: My work and lifestyle will be the same either way, as I said.   This is all about how it goes ""on the books.""    [emphasis mine] As an independent consultant myself, when I hear something like ""the work will be the same either way"", I think: ""Here thar be dragons!"".  Let me explain: If you go the independent contractor route, then you better act like one.  The IRS (and the CRA, for Canadians) doesn't take lightly to people claiming to be independent contractors when they operate in fact like employees. Since you're not going to be behaving any different whether you are an employee or a contractor, (and assuming you'll be acting more like an employee, i.e. exclusive, etc.), then the IRS may later make a determination that you are in fact an employee, even if you choose to go ""on the books"" as an independent contractor. If that happens, then you may find yourself retroactively denied many tax benefits you'd have claimed; and owe penalties and interest too.  Furthermore, your employer may be liable for additional withholding taxes, benefits, etc. after such a finding. So for those reasons, you should consider being an employee.  You will avoid the potential headache I outlined above, as well as the additional paperwork etc. of being a contractor. If on the other hand you had said you wanted to maintain some flexibility to moonlight with other clients, build your own product on the side, choose what projects you work on (or don't), maybe hire subcontractors, etc. then I'd have supported the independent contractor idea.  But, just on the basis of the tax characteristics only I'd say forget about it. On the financial side, I can tell you that I wouldn't have become a consultant if not for the ability to make more money in gross terms (i.e. before tax and expenses.)  That is: your top line revenues ought to be higher in order to be able to offset many of the additional expenses you'd incur as an independent.  IMHO, the tax benefits alone  wouldn't make up for the difference. One final thing to look at is Form SS-8 mentioned at the IRS link below.  If you're not sure what status to choose, the IRS can actually help you.  But be prepared to wait... and wait...  :-/ Additional Resources:" Are you allowed to have two personal current accounts with a debit card attached to each one? Yes, you may have as many current accounts you want, but you should ask why should I have more than one. It is cumbersome and time consuming to keep track of ongoing incoming credits and outgoing debits. Open to bank fraud too, if you aren't careful. If yes, can a sole trader in the UK use the second personal account for business transactions? Yes, but no payments to the business. At the end of the year you file you P11D, even if you have a business bank account. You would need to justify the expenses by keeping the bills and stuff. As it will be a personal account, you have to little more careful, not to mix personal and business expenses.  If you are allowed to use a second personal account for business transactions, then why would someone choose to open a business bank account, where you have to pay? What are the benefits? First of all no company will pay into you personal account, for any transactions, they need to pay you. They will only pay to an account registered with the business, with whom they are dealing with. Benefits are you have your business expenses sorted out in one account and personal expenses in other. Pure business expenses comes out of the business account, rather than from your personal purse, keeps the accounts smooth. No need to sort out expenses at the end of each quarter or at the end of each month. Since your YouTube income is considered self-employment income and because you probably already made more than $400 in net income (after deducting expenses from the $4000 you've received so far), you will have to pay self-employment tax and file a return.  This is according to the IRS's Publication 17 (2016), Your Federal Income Tax, so assumes the same rules for 2016 will remain in effect for 2017: You are self-employed if you: Carry on a trade or business as a sole proprietor, Are an independent contractor, Are a member of a partnership, or Are in business for yourself in any other way. Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job. You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if: Your net earnings from self-employment (excluding church employee income) were $400 or more, or You had church employee income of $108.28 or more. (See Table 1-3.) Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee's wages. For more information about this tax, see Pub. 334, Tax Guide for Small Business. I'd also note that your predicted income is getting close to the level where you would need to pay Estimated Taxes, which for self-employed people work like the withholding taxes employers remove their employees paychecks and pay to the government. If you end up owing more than $1000 when you file your return you could be assessed penalties for not paying the Estimated Taxes. There is a grace period if you had to pay no taxes in the previous year (2016 in this case), that could let you escape those penalties. "In the US, you'd run the risk of being accused of fraud if this weren't set up properly.  It would only be proper if your wife could show that she were involved, acting as your agent, bookkeeper, etc. Even so, to suggest that your time is billed at one rate but you are only paid a tiny fraction of that is still a high risk alert.  I believe the expression ""if it quacks like a duck..."" is pretty universal. If not, I'll edit in a clarification.  note -I know OP is in UK, but I imagine tax collection is pretty similar in this regard."