First time using 1040 ES, several questions....problem is I am employed other places who will use W2!?

When using the worksheets that accompany Form 1040-ES you have to figure your total estimated tax liability and then back out the taxes that are withheld from your job to arrive at the extra estimated tax that must be paid. You are most likely in the 15% bracket so you'll need roughly 30% of the total self-employment income to cover the income and self-employment taxes.

How you choose to handle this is up to you. You can either make 4 quarterly payments of $630 each or have an additional $60 per week withheld from your W-2 job. Either way will result in about the same amount of extra paid-in tax to cover what you'll owe and keep you out of penalty territory for underpayment of estimated taxes and keep any balance due at filing time to a minimum next year.

To avoid any penalties at filing time (but it may leave you with a substantial debt) look at your total tax liability on your 2009 return. Figure out how much tax will be withheld from your pay in 2010. (Estimate a bit low if need be for safety.) If that amount is equal to or greater than the total tax liability for 2009 you don't need to make any estimated payments at all. If it's less, you will need to pay in the difference either through estimated payments of additional tax withholding at your job. Please note that that ONLY avoids the penalty for underpayment of estimated taxes. You will still owe the difference at filing time next year.

When you owe the IRS at filing time you may have to pay a penalty for underpayment of tax throughout the year. There are 3 "safe harbor" rules that exempt you from the penalty:

1. You owe less than $1,000.

2. You have paid in at least 90% of the current year's tax liability, regardless of how much you owe.

3. You have paid in at least 100% of the PRIOR year's tax liability, regardless of how much you owe. This is the one that most small business owners use to avoid underpayment penalties. (There's also a 110% rule for high-income folks, but your income is nowhere the cutoff for that so I'll just skip that one.)

You estimate your tax based on ALL of your income, then back out the amount that you expect to have withheld. The difference is what you should pay in estimated tax with the 1040ES.

Include only the income you will be getting from your 1099 job. Your W2 jobs will take out withholding for those wages based on the information you provide on your W4.