Avoid Tax Time; The IRS brings the good news to the taxpayers in the United States to avoid tax-time surprises and other related problems. Those taxpayers who paid insufficient tax during 2019 can still avoid a tax-time surprise. This can be done by making a quarterly estimated tax payment now, directly to the Internal Revenue Service (IRS). The IRS announced deadline of 15th January, 2020 i.e. Wednesday to make a payment for the fourth quarter of 2019.
How to Avoid Surprise Tax Bill in USA?
Income taxes are pay-as-you-go tax (PAYG) in the United States. It means that the taxpayers are required to pay the majority of their taxes to the IRS during the year when income is received. Adopt any of the method to avoid surprise at tax-time in USA. To pay income taxes to IRS, there are two methods:
- Withholding from paychecks, Social Security benefits, pension payments, or various other government payments. This method is used by most of the taxpayers in USA.
- Making quarterly estimated tax payments throughout the year as income is received. This method is used by self-employed people and investors in USA.
All taxpayers in USA can make use of any of the above method to avoid surprise tax bill as well as the elated penalties and fines. You can request callback to Black Ink to get the best preparation and filing service for quarterly estimated tax throughout United States.
What Happens If You Miss A Quarterly Estimated Tax Payment?
If you failed to make the required quarterly estimated tax payments earlier in the year, then you can easily lessen or even eliminate the penalty. To cover the missed quarterly estimated returns, the taxpayers should make a payment as soon as possible. If the taxpayers owe below $1,000 in tax after subtracting their withholdings and credits, they can avoid the penalty. Furthermore, those taxpayers who paid at least 90% of the tax for the current year or 100% of the tax shown on the return for the previous year can also avoid penalty.
What Is The Penalty For Not Paying Quarterly Estimated Taxes?
If the taxpayer owes the IRS for not making estimated payments till the end of the year, a penalty is applied in such case. The estimated tax penalty is basically comprised of an interest. The taxpayer is charged for not paying taxes throughout the year. The interest rate for underpayments by a taxpayer is 6% for the tax year 2019. This rate is set by the IRS and subjected to change quarterly. Recently, IRS waived late tax filing penalties and fines also to facilitate taxpayers for making payments smoothly.
How to Calculate Accurate Withholding Tax?
The IRS introduced IRS Tax Withholding Estimator, an online tool to check the possible tax liability of every taxpayer in USA. Using withholding estimator, the taxpayers can find the right amount of withholdings. The tool also gives the information that whether the taxpayer is required to make an estimated tax payment or not. The IRS also provides Form 1040-ES with a worksheet to figure the right amount to pay as taxes in USA. Contact us to get further help on these matters.
Important Notes About Paying Quarterly Estimated Taxes:
- To make quarterly estimated tax payments is especially important for a number of taxpayers. The examples include those who owed taxes when they filed their 2018 return as well as those who itemized previously but will now claim the increased standard deduction, employees with non-wage sources of income, two wage-earner households as well as individuals with complicated tax situations can also get benefits of estimated quarterly payments.
- Making a quarterly estimated tax payment now can help those taxpayers who owed taxes when they last filed to the IRS. Those who did not adjust their 2019 withholding when they file their 2019 return next year may discover that they owe taxes yet again, and even a penalty. Instead of panicking, they should go for the option of estimated quarterly payments to avoid the surprise bill next year.
- A variety of financial transactions often produce an impact of unexpected tax bill. Specially those transactions that are made late in the year are of high concern. The examples cover year-end and holiday bonuses, capital gain distributions from stocks and mutual funds, stock dividends, virtual currency, bonds, real estate or other property sold at a profit.
How To Make Estimated Tax Payment Quickly?
The easiest, fastest and quickest method to pay your estimated tax bill is e-filing to IRS by Direct Pay or the Treasury Department’s Electronic Federal Tax Payment System (EFTPS). The IRS also provides help if you can’t afford your tax bill this year.
Get Black Ink’s Help to Pay Estimated Tax Bill:
The tax filing season is about to start. Get ready now to plan your taxes as it can be too early to file a 2019 return but it is already late now to get ready for tax filing season. Get the best quarterly estimated taxes filing service in USA.