Need to pay estimated taxes? A couple of tips
Home
Firm Overview
Attorneys
Tax Law Services
CPAs & Accountants
Retainer & Fees
Blog
Contact
On behalf of Pridgeon & Zoss, PLLC | Jul 12, 2019 | IRS
The middle of July is a good time to talk about paying your quarterly estimated taxes because the need to file is not imminent. Estimated taxes are required for many people who own small businesses or are self-employed, including those working as independent contractors for an established company. They also may be required for people who receive income from interest, dividends, capital gains, prizes and awards.
Estimated taxes are due on the 15th of April, June, September and January. You generally must pay 90% of your total estimated tax liability, or 100% of last year’s tax liability (whichever is smaller) in order to avoid a penalty. This may include not only income taxes but also the self-employment tax and the alternative minimum tax, if applicable.
According to the IRS , you must pay estimated taxes if both of these two situations apply to you:
You expect to owe at least $1,000 in taxes this year, excluding any withholdings or refundable credits
AND
You expect your withholdings and refundable credits to be less than the smaller of: 90% of the taxes to be paid this year 100% (or 110% for certain high-income taxpayers) of last year’s taxes
90% of the taxes to be paid this year
100% (or 110% for certain high-income taxpayers) of last year’s taxes
Use IRS Form 1040-ES to figure and file your estimated tax. (Corporations generally use Form 1120-W.) You will need to determine:
Your expected adjusted gross income
Your taxable income
Any deductions or credits
Your total taxes due
Tip No. 1: If you have missed a quarter, file and pay ASAP
There are penalties and interest associated with failing to make your quarterly estimated tax payments. These penalties can be significant and will only grow larger the longer you wait to file. It’s generally less expensive to pay the penalty as soon as possible. That said, the penalty may be waived if:
Your failure to pay was due to a disaster, casualty or other unusual situation that would make it inequitable to impose the penalty, or
You reached age 62 and retired, or you became disabled during the tax year and your underpayment was due to a reasonable cause, not willful neglect
Tip No. 2: Consider hiring a professional to do your taxes
Coming up with a good estimate of your income can be a challenge. The process of figuring estimated taxes is essentially like doing your tax return ahead of time, then refiguring it each quarter.
A professional may be able to find tax savings that you wouldn’t find on your own. At the very least, they could help you avoid mistakes and the costs associated with late or partial payments. Depending on your circumstances, professional help could end up paying for itself.
Subscribe To This Blog's Feed
Audits (64)
Back Taxes Or Tax Debt (78)
Delinquency (23)
IRS (138)
Tax Controversy (80)
Tax Liens (10)
Tax Litigation (5)
Uncategorized (2)
September 2020 (1)
July 2020 (1)
May 2020 (1)
February 2020 (1)
January 2020 (2)
December 2019 (3)
November 2019 (4)
October 2019 (5)
September 2019 (5)
August 2019 (4)
July 2019 (4)
June 2019 (4)
May 2019 (5)
April 2019 (6)
March 2019 (3)
February 2019 (3)
January 2019 (5)
December 2018 (4)
November 2018 (5)
October 2018 (4)
September 2018 (4)
August 2018 (5)
July 2018 (4)
June 2018 (4)
May 2018 (5)
April 2018 (5)
March 2018 (3)
February 2018 (4)
January 2018 (5)
December 2017 (4)
November 2017 (4)
October 2017 (5)
September 2017 (3)
August 2017 (3)
July 2017 (6)
June 2017 (4)
May 2017 (4)
April 2017 (6)
March 2017 (5)
February 2017 (4)
January 2017 (7)
December 2016 (4)
November 2016 (4)
October 2016 (2)
September 2016 (4)
August 2016 (4)
July 2016 (6)
June 2016 (6)
May 2016 (4)
April 2016 (3)
March 2016 (2)
February 2016 (5)
January 2016 (5)
December 2015 (5)
November 2015 (4)
October 2015 (5)
September 2015 (2)
August 2015 (5)
July 2015 (3)
June 2015 (4)
May 2015 (4)
April 2015 (3)
March 2015 (5)
February 2015 (4)
January 2015 (5)
December 2014 (5)
November 2014 (3)
October 2014 (5)
September 2014 (4)
August 2014 (4)
July 2014 (4)
June 2014 (4)
May 2014 (5)
April 2014 (4)
March 2014 (4)
February 2014 (4)
January 2014 (5)
December 2013 (4)
November 2013 (4)
October 2013 (4)
September 2013 (4)
August 2013 (5)
July 2013 (4)
June 2013 (4)
May 2013 (4)
April 2013 (5)
March 2013 (5)
February 2013 (3)
January 2013 (5)
December 2012 (4)
November 2012 (4)
October 2012 (5)
September 2012 (4)
August 2012 (4)
July 2012 (5)
June 2012 (4)
May 2012 (5)
Taxes You Might Not Expect As A Small Business Owner
Your self-employed tax obligations
Options for paying outstanding business taxes
Preparing your business for a tax audit
The IRS looks to crack down on virtual currency tax compliance
Options for Outstanding Balance IRS Collections and Currently Not Collectible Status Settlement Options Offers in Compromise Installment Agreements
IRS Collections and Currently Not Collectible Status
Settlement Options Offers in Compromise Installment Agreements
Offers in Compromise
Installment Agreements
Tax Disputes Tax Litigation Audits Tax Appeals Appealing a Levy Action
Tax Litigation
Audits
Tax Appeals Appealing a Levy Action
Appealing a Levy Action
Liability for Uncollected Taxes Federal IRS Minnesota Department of Revenue Penalties and Fines Innocent Spouse Relief
Federal IRS
Minnesota Department of Revenue
Penalties and Fines
Innocent Spouse Relief
Responding to Notices Urgency to Respond Audit Notices IRS Notices – Why You Need a Lawyer MN Dept. of Revenue Notices – Why You Need a Lawyer Letters by Certified Mail Make Payments With Each Notice
Urgency to Respond
Audit Notices
IRS Notices – Why You Need a Lawyer
MN Dept. of Revenue Notices – Why You Need a Lawyer
Letters by Certified Mail
Make Payments With Each Notice
Business & Payroll Taxes Trust Fund Assessments Complying with Sales and Use Tax Laws
Trust Fund Assessments
Complying with Sales and Use Tax Laws
Self-Employed No Taxes Withheld
No Taxes Withheld
Edina Tax Law Office Pridgeon & Zoss, PLLC 7301 Ohms Lane, Suite 420 Edina, MN 55439 Telephone: 952-835-8320 Fax: 952-835-0201 Edina Law Office Map
St. Anthony Tax Law Office Pridgeon & Zoss, PLLC 2812 Anthony Lane South, Suite 200 St. Anthony, Minnesota 55418 Telephone: 612-455-8948 Fax: 612-788-9879 Map & Direction
* Our attorneys will briefly discuss your situation with you to determine if your issues fall within the scope of the services we offer. If we determine that our expertise and experience match up with your legal needs, then the we will formally create an attorney-client relationship through an engagement letter signed by Mr. Pridgeon or Mr. Zoss and you as the client. An initial consultation discount is included on our initial invoice to all new clients. We do not offer free consultations to non-clients.
Pridgeon & Zoss, PLLC , provides legal counsel for clients in Hennepin County, Ramsey County, Dakota County and Washington County, Minnesota, including Twin Cities area communities such as Minneapolis, St. Paul, Bloomington, Brooklyn Park, Burnsville, Eagan, Edina, Minnetonka, Richfield, St. Louis Park, Wayzata, White Bear Lake, Eden Prairie, Woodbury, Golden Valley, Maplewood, Roseville, Mendota Heights and Plymouth. The firm also serves clients in St. Croix County, Wisconsin, including communities such as Hudson and Menomonie.
© 2020 Pridgeon & Zoss, PLLC . All Rights Reserved.
Disclaimer | Site Map | Privacy Policy | Business Development Solutions by FindLaw , part of Thomson Reuters