Am I required to make quarterly estimated tax payments??
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- เผยแพร่เมื่อ 19 มิ.ย. 2024
- Quarterly estimated tax payments come as a surprise to many first-time self employed business owners. When you don't have an employer withholding and remitting taxes on your behalf throughout the year, the responsibility falls on you! But you're not always required to make payments. In this video I show you how to do a quick but fairly accurate way to estimate what you should pay (if anything) and how to make those payments.
3 rules: turbotax.intuit.com/tax-tips/...
Calculator: www.mortgagecalculator.org/ca...
Where to pay: www.irs.gov/payments
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Finally, a straightforward and clear presentation that includes the final step of how to pay! After years of W2 wages and just filing using free online programs, all this was new. Thank you!
Thank you!! I never have made these (because enough withdrawn on W-2) but your simple explanation makes me want to look at your other videos.
i hate taxes and accounting goshhhh
Thank you very much for the video! Can you explain this point: if you pay or have paid an amount equal to the tax for the previous year, you don't have to make estimated payments? So do I have to make an estimated payment once in the first quarter or does it relate to the fact that I have already paid the total tax for the previous year? Or can I pay the amount next year, for example, I know that my taxes will be higher for 2024 than for 2023 and I plan to pay them in March 2025, so I don't have to make planned quarterly payments during the year?
Great video! You kind of touched on it, but I wanted to clarify - if I want to pay 100% of prior year tax, would I take line 24 less any credits on lines 27-29 to come up with the total to pay?
My CPA office is so understaffed they asked for me to coming in May to deal with my new studio/LLC.
My CPA friend knows I’m a start up and wouldn’t owe so she recommended doing nothing. But the downside might be a penalty 😮
I really have no idea. I’ve put $55k in my studio and have collected $3k in sales so far.
The advice to divide what I owed last year by 4 and make that installment was super helpful.
Excellent video! How about state estimated taxes next? Particulary Michigan which has a brutal 25% penalty if you didn't make estimated tax payments.
I'll think about it 😂
Making a single Q4 100/110% safe harbor payment seems the best plan if floating an overpayment isn’t a financial hardship. 30s to compute and a couple of minutes to pay.
Thanks for the heads up on looking into our state taxes also.
I am an employee, my wife is Schedule C self-employed. We converted $260k IRA to Roth this year, paid the 24% due on it immediately after the conversion. Therefore our 2023 Total Tax Liability was unusually large @ $79k, my CPA told us to pay our quarterlies based on 2023 taxes @$20k per quarter. That would equal more than my wife earns for the whole year! I see no reason I cannot use the 90% rule for our 2024 quarterlies based on the expected 24% rate (again) based on my wages, her expected Schedule C and a much smaller Roth Conversion. Any thoughts? Thank you - excellent channel, new subscriber!
I was advised that I could roll over traditional IRA funds, equal to my taxes from the previous year, to a ROTH in the fourth quarter and have the entire amount withheld. The IRS would recognize that as covering my taxes due.
I've been struggling with this, I had no tax returns for the past 5 years due to several major injuries I had, and then unemployment since I got to where I could do some work. This year I'm self employed. I've made over a $1k, but have no idea how much I will make for the year. I've been holding back 30% of my income, but my pay can widely vary month to month. So I still don't know how much to pay quarterly.
Hello, Mark! Thank you for the video! I have one question. What if I own over $1000 and have not made the payments for the Q1, Q2, Q3, but I will pay over 90% of my tax bill in a Q4. Would I still have to pay a late fee?
If it ends up that you were required to make estimated payments and you missed the first three quarters then the late fee would be assessed only on those payments that were late. Much of the time the penalties can be minimal, but it just depends on the overall amount of tax due. But the good news is that you can sometimes have those waived if you call the IRS.
I have one more year to pay off my $500 repayment for my first-time home buyer credit in 2008. I just started earning self-employment money last year. When determining if I'll have to pay more than $1000. for 2024, do I factor in that $500 repayment?
I ran into this with Maryland. I thought that I could put my money a high yield savings account and earn interest. They charged me late payment fees, even though I paid my entire tax debt in full.
What if I have two businesses, do I make the adjustment based off of total revenue of both business combined or separate? Also, would it be gross income or net income?
How to put the breakdown for federal, social security and Medicare if i just pay the total tax due whn i pay online?
I paid a big capital gain tax from selling my house last year. Do I need to make estimated quarterly payments this year to equal 90% of that big tax last year even though my income will be back to normal this year?
so if all my inome is in first 2 quarters and I pay enough for the year in each quarter do I have to make paymentsin remaining quarters?
Am i required to mail the 1040ES form to the IRS if i make the payment online?
Still doing my 2022 taxes. eBay reseller. From ebay sales report, where do I record ‘Taxes and Fees’ on my schedule C? I know that ebay collected these taxes from buyers. There included in my Gross Sales. Aren’t I required to show taxes were paid, if I’m claiming them in Gross?
Yes if taxes are included in the gross sales amount you are reporting, then you will deduct those taxes simply on the taxes and licenses line of your schedule C
It’s Q4, what if you haven’t made these payments all year? How does that affect your return at the end of the year?
It depends if you were required to make them for that year or not. If you were but didn't make the payments, then late fees may be assessed based on the total unpaid amount that was due.
so i have W2 income (with withholdings) but i also have schedule c income. I have never done quarterly estimated payments. Last year I owed $9633, this year I owed $10,147, so actually 514 more. I use software freetax usa and nothing was flagged. When will the IRS notify me if I need ot make an estimated payment, and whats the penatly? I might be worth it to me to just hold the money at these high interest rates.
You are right, you might be able to earn more on it and still come out ahead after any penalty. The IRS will not notify you if you need to make estimated payments, but they will notify you after the fact if they think you owe penalties.
Thank you for this information, I made estimated tax payments in 2023 and if I understood you correctly, it is up to me to keep records on my payments(I paid by voucher and check) and put the full amount I paid on my tax return as I will not be receiving anything from the IRS stating what I paid them for estimated taxes. Is this correct, I will not be getting anything from the IRS related to the estimated taxes I paid for the year but they have record of the payments I made (they cashed the checks)? Again, thank you.
Correct, on your taxes you'll put what you paid and it will be factored in to your tax return to determine how much is still owed or how much of a refund your entitled to. The IRS won't let you know unless you enter the wrong amounts that don't line up with what's in their system.
Thank you! What impact does filing an an estate return (my passed away last year) have on my individual return? Specifically, the sale of her house (in Colorado). My brother and I inherited the property and created an estate account to run the finances through. What do I need to claim on my individual return (if anything) as it relates to our mom's estate? Thank you for your insight. @@notyourdadscpa
Thank you!@@notyourdadscpa
But how do I estimate taxes if it’s a company I just opened 3 months ago and prior I was just a normal employee?
How do we estimate state tax?
are ACA (obamacare) health care premiums counted as an expense?
What if we owe more than $1000. And don’t pay the estimated quarterly taxes but rather have an additional amount taken out of our check that equals what our underpayment was for tax year 2023?
That's a great way to do it, just increase the W-2 withholdings to cover the additional tax from the self employment
I'm retired and started driving for Uber and Lyft.
With my regular pension I always just broke even.
This year with the income from Uber and Lyft I had to pay $1169 after all expenses and deductions. I use Turbotax.
I started driving the last 3 months of 2022 so I had no problems and only owed $412 in taxes.
2023 I drove more, had to pay $1169 and now when I printed my tax forms I did it say's I have to pay $285 for 4 quarterly payments.
Never knew this, never heard of it.
Questions .......
If I don't make these quarterly payments how much of a Penalty would it add up to for next year?
If I don't make the payments and I owe less than $1000 on my taxes would I still have to pay a Penalty?
I'm planning on not driving much this year so I know I will owe less than $1000 in taxes next year so that means if I pay it will have to come from my limited Pension Check and I will be getting a refund next year.
What if you say No but then do make over $1000 ?
I made less than 10k income last year and had no tax liability for 2023 but have 8k in trading profits this 2024 tax year do I still have to pay quarterly taxes?
if you make a substantial amount of money in the stock market day trading the first quarter and then lose it all back to by the end of the year day trading would you still owe the irs the 8% penalty on the taxes not paid the first quarter of estimated taxes?
No it will be based on the annual total.
@@notyourdadscpa thankyou for the reply. It sounds like in this scenario you would have just given the irs a free loan and they would owe you back.
If you're making estimated tax payments each quarter based on your 100% of last year's tax, it's 25% of the 100% each payment? You don't have to pay the full 100% by the first quarter it's due?
Correct 👍🏻
@@notyourdadscpa Thank you!
Wow, this is horrible 😭😭