With tax season in full swing, it’s a good time to start thinking about your estimated tax payments. If you do not pay the appropriate amount of estimated taxes each year, the IRS may impose an underpayment penalty on you.
Who Should Make Estimated Payments?
You should make estimated tax payments if you receive self-employment income. In other words, if you’re an independent contractor who doesn’t have payroll withholding from your employer, then you need to make estimated payments. Even if you do have regular withholding from your employer, you should also make estimated payments if you have any other income that taxes are not withheld from, such as money received due to alimony or dividends.
How Much Should You Pay?
Figuring out how much you need to pay in estimated tax payments can be tough. How much you end up paying really depends on how much you expect your adjusted gross income to be minus any credits or deductions. Coming up with an exact number may require you to reach out to a qualified tax help pro. In the Austin area, you can depend on Taxation Solutions, Inc. to help you determine how much you need to pay in estimated tax.
For help calculating your estimated tax payments, you can turn to the tax specialists at Taxation Solutions, Inc. We’re here to help Austin-area taxpayers solve all of their tax issues!