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It's crunch time! If you haven't already, it's time to file your taxes before they are due this Monday (April 18, 2011). If you need an extension, go ahead and file a an extension with Form 4868.You can buy yourself about 6 months time to get your tax filing done as it won't be due until October 17, 2011.
What do Estimated Taxes Cover?
For those self-employed, you also should be aware that estimated taxes are due Monday as well.
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. Here are the upcoming due dates for the rest of the year.
- April 18, 2011 (1st Quarter)
- June 15, 2011
- September 15, 2011
- January 17, 2012
Payment Methods for Estimated Taxes
- 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. If you underpay your taxes, there are penalties. The IRS will send you the bill.
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