Estimated Payments- Fast Facts
Estimated payments are made quarterly by taxpayers in April, June, September, and January.
“The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay as you go.
o Withholding. If you are an employee, your employer probably withholds income tax from your pay. In addition, tax may be withheld from certain other income, such as pensions, bonuses, commissions, and gambling winnings. The amount withheld is paid to the IRS in your name.
o Estimated tax. If you don’t pay your tax through withholding, or don’t pay enough tax that way, you might have to pay estimated tax. People who are in business for themselves will generally have to pay their tax this way. You may have to pay estimated tax if you receive income such as dividends, interest, capital gains, rents, and royalties. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax.”1
Estimated payments can be made online instead of sending in the payment voucher.
For our clients that make estimated payments, we will provide payment vouchers for the amounts due with the completion of the annual tax return or throughout the year prior to payment due dates.
If you have significant changes to your income, please keep us updated. This may cause your estimated payments to change.
At Hark and Associates, PC, we are here to provide high quality service with the highest ethical standards in the business of CPA firms. If you have questions regarding estimated payments, we’re happy to help. Schedule a call with one of our accountants today.