Don’t Forget to Pay Estimated Taxes!
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Just a reminder, next Thursday (September 15th), estimated tax payments are due.
What do Estimated Taxes Cover?
In case you’re curious about the purpose of estimated taxes, I checked on the IRS site to find some information.
Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.
Estimated tax is used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. If you do not pay enough through withholding or estimated tax payments, you may be charged a penalty. If you do not pay enough by the due date of each payment period you may be charged a penalty even if you are due a refund when you file your tax return.
When are Estimated Taxes Due?
Estimated taxes are due on an almost quarterly basis.
- January 15th
- April 15th
- June 15th
- September 15th
Payment Methods for Estimated Taxes
There are several ways to take care of your estimated taxes. I prefer to pay online as it's quick and easy.
- Mail- Check the IRS to see which location is correct one for you.
- Phone – Electronic Federal Tax Payment System has phone lines to take your payments
- 1-800-555-4477 (businesses)
- Online –Electronic Federal Tax Payment System
If you want to find out how to enroll for EFTPS, check out my post on TurboTax’s blog to find out.
Make sure you calculate what you owe ahead of time. If you underpay your taxes, there are penalties and the IRS will send you the bill.
Thoughts on Estimated Taxes
How many of you have estimated taxes due?
Photo Credit: alancleaver_2000
Don’t remind me. Aside from the fact that I run a financial blog and I’m doing very well with it I also own half of a manufacturing business and I’m earning way above expected profits this year. I know that’s a good thing but come tax time I’m going to take a huge hit.
Good to know as I start to monetize my blog. I will have to read more about this. Thanks for the heads up!
Ugh I haven’t paid estimated taxes so far in my freelance life and I’ve asked my accountant about it who said don’t worry about it till I make more on the side as I do have a full time job but it makes me nervous, I would hate to get charged a fee because I didn’t pay on time.
I have paid estimated taxes for many years since my husband died. I am not a business owner, I have no write offs, nor am I a priviledged taxpayer with tax write-offs passed on to me. Every quarter, I send in my amount of estimated taxes. I am also one of the 51% that alledgedly doesn’t pay taxes i.e not in the income bracket that most people can’t imagine being in now a days. What I am saying IS, there are thoses of us who have been paying estimated taxes for years in lower incomes that fall below the news media radar. Believe me, I would rather keep them off my door step than be penalized because I decided it wasn’t fair. As we have found out in the economic, many people are not able to save let alone be disciplined enough to pay at the end of the year, thus the quarterly estimated tax was introduced for individuals. I have been late a couple of times and they over looked my small indicretions, BUT I don’t push the envelope of insanity. Pay the estimated taxes.