We can help you determine whether quarterly estimated payments are required based upon your prior year’s return and current year’s anticipated income.
The law requires that income taxes must be paid through out the year. If enough is not paid in by December 31, then you could be liable for penalties and interest. The IRS allows tax payers to make up any tax shotages four times a year, otherwise known as estimated payments. In most cases, if the bulk of your income is dervied from your employer, you pay income taxes each pay period and most of your tax liability is paid by the end of the year. However, if your income includes invetments, retirement money, or you own or operate a business, taxes are not automatically withheld like a paycheck and you could be required to make estimated payments.
We can help you determine whether quarterly estimated payments are required based upon your prior year’s return and current year’s anticipated income. We will also provide you with the required payment amount and instructions. Additional planning will benefit you in the long run causing you to have a more targeted amount for your taxes!
If anything has changed with your income, please let us know so we can go over any adjustments necessary to make the correct estimated payment.