Tax season is one of the busiest and most stressful times of the year for many people, both business owners, and workers alike. With so many forms, technicalities and specifics, it can be hard to keep all of the details straight; the difference between a tax return and an estimated tax payment sometimes confuses people. While both seek to accomplish to same goal–making sure you pay your dues to the proper entities–there’s a big difference between a tax return and an estimated tax payment.
Tax Payment Options
Everyone has to pay taxes on the money that they earn throughout the year; for most employees, these taxes are withheld automatically directly from their paychecks. Tax filing is the process of making sure you paid the appropriate amount. For some people, too much was withheld in taxes, and they receive a refund.
When a you have income that is not subject to withholding taxes, the IRS allows you to make payments towards what you estimate you should pay in taxes. They require those payments in four equal statements, one for each quarter. Not everyone is subject to an Estimated Tax Payment, so a conversation with a professional can help you determine what’s right for you.
Estimated Tax Payment Plans
What you owe the federal and state government every year changes with your figures. If you used an Estimated Tax Payment plan to keep up with what you owed last year, make sure to have a conversation with your accountant about any adjustments that must be made this year. Keeping the mindset that an Estimated Tax Payment is a “pay-as-you-go” plan, you should be able to keep your accounts balanced and in order. If you do not adjust appropriately, you could end up facing a penalty at the end of the year.
Make sure you keep track of your estimated gross income, taxable income, taxes, deductibles, and credits for the calendar year. Using the 1040-ES form online can help you stay focused and heading in right direction, making it easy to process your payments to the IRS. If you do not pay enough during the year, you will owe at tax time. If you overpay, don’t worry, you’ll receive a refund at tax time.
Professional Tax Services in NH
This tax season doesn’t have to be overwhelming. Having a professional help you navigate through all of the forms and details can be highly beneficial. We can help you work through any adjustments that you may need to make for this year’s changes. Don’t get caught off guard! Contact our professionals at Tax Services of Londonderry to make sure you meet this year’s tax requirements. You don’t have to go it alone!