WWW.ICONTAXGROUP.COM PHONE: 877.778.1770
by Michael Lodge
Question: How do I know if I have to file quarterly individual estimated tax payments?
So many of our clients are self employed, receiving 1099-MISC income and preparing a Schedule C for business or profession. The question continues to come up about making estimated tax payments. If you are making money and have expenses but have a positive bottom line and your going to owe taxes – make estimated tax payments. It will save you on interest and penalties at the end of the year.
You must make estimated tax payments for the current tax year if both of the following apply:
- You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
- You expect your withholding and refundable credits to be less than the smaller of:
- 90% of the tax to be shown on your current year’s tax return, or
- 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)
There are special rules for:
- Farmers and fishermen
- Certain household employers
- Certain higher income taxpayers
- Nonresident aliens
If you have tax questions, please submit them to: firstname.lastname@example.org