Tax Tips on Making
Estimated Tax Payments
Small Business
Accounting - Taxpayers
usually will have taxes withheld from their pay if they are an employee.
However, if a person doesn’t have taxes withheld, or they don’t have enough tax
withheld, they may need to make estimated tax payments. Taxpayers that are
self-employed normally have to pay their taxes this way.
Here are five tips about
making estimated tax payments:
When
the tax applies.
Taxpayers should pay estimated taxes if they expect to owe at least $1,000 in
tax for 2017 after subtracting their withholding and refundable credits.
How
to figure the tax.
Taxpayers need to estimate the amount of income they expect to receive for the
year. Taxpayers also need to make sure they take into account any tax
deductions and credits that they will be eligible to claim.
When
to make payments.
Taxpayers normally make estimated tax payments four times a year. The dates
that apply to most people for 2017 are April 18, June 15 and Sept. 15. There is
one last payment on Jan. 16, 2018.
When to change tax
payments or withholding. Major life changes like the birth of a child can
affect taxes. When these changes happen, taxpayers should consider revising
their estimated tax payments for the year. If the taxpayer is an employee, they
may need to change the amount of tax withheld from their pay. If this is the
case, the taxpayer should give their employer a new Form W–4, Employee's
Withholding Allowance Certificate.
How
to pay estimated tax.
Taxpayers have a variety of ways available to them to pay estimated tax. They
can pay online, by phone or from their mobile device. Direct Pay is a secure
online service to pay a tax bill or pay estimated tax directly from a checking
or savings account at no cost. Paying by mail is another option. If a taxpayer
pays estimated tax through the mail, they should use the payment vouchers that
come with Form 1040-ES.
ABA Tax Accounting offers tax help on various topics. Also, if you'd
like to learn more about our CFO Services please feel free to contact me.
Amare
Berhie, Senior Accountant
(651)
300-4777
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