Should You Pay Estimated Taxes?

For most people tax time only comes once year. However, for anyone who has to pay estimated taxes a large tax bill could be due several times a year. Again, most people do not have to worry about paying estimated taxes, but there are several circumstances that will put you in that category. The most common reason people need to pay estimated taxes is because they have self-employment income, but there are other reasons as well. You may need to pay estimated taxes if any of the following apply to you.

  • You or your spouse earned self-employment income.
  • If the stock market was kind and you cashed out a large portion of your gains, but you did not adjust your withholding on your W-4, then you might need to pay estimated taxes.
  • If you hire a nanny and pay her federal payroll tax for her, then you can make those in quarterly estimated taxes.
  • Any income you earned that was not subject to federal withholding on your W-4 could be subject to estimated taxes.

Not everyone who falls into one of these categories needs to pay estimated tax. So how do you decide if you should or shouldn’t pay these taxes? There are many answers to this question, but the bottom line is if you made enough income from untaxed sources that you will cause you to owe taxes when you file your return then you should make estimated tax payments. If you fail to do so, then you could pay a penalty. On the other hand if your deductions and credits will be more than the tax amount you would owe on this income then you are most likely OK in skipping these estimated payments. If you still aren’t sure whether or not you should make estimated tax payments, then contact us at GROCO for more advice. We can look at your situation and help you determine if these payments are necessary. Please contact us for help at 1-877-CPA-2006, or click here.

/GROCO
Posted in

Business in New York Being Buried by Heavy Tax Load

New York, New York: It’s the town so nice they named it twice. But when it comes to taxes in one of the world’s greatest states, things aren’t so nice. That’s because New York is one of the worst places to live if you don’t want to pay a lot of taxes.  New York has…

Thinking About Loaning Cash to Your Business?

Are you looking to start a business, or is your current business in need of some cash? Maybe you can’t get a loan from a bank, or maybe you would rather not use a bank. What about lending some of your own money to your company? Can you do that? Yes, you can, but you’ll…

Tips for Filing Your Tax Return

Which Tax Extensions Will Affect Your 2014 Return?

Are You Ready for Your 2014 Taxes? Although many people might answer yes to that question, the fact is taxpayers can only do so much as long as Congress is dragging its feet on several expired tax extenders. The fact that these extenders are still sitting in limbo is nothing new. It happens almost every…

So-Called Temporary Recession Tax Not So Temporary

Remember the great recession of 2009? Although the recession may now be a thing of the past, some so-called “temporary” taxes are having a harder time fading into the background. That’s because many states throughout the country are still collecting on tax bills that were enacted solely for the purpose of refilling public reserves. Fourteen…