Estimated Taxes are due today, but what exactly are they?
Most working citizens generally work on a “pay-as-you-go” system when it comes to paying income tax. This means that the IRS will automatically deduct their income tax from your check. But what about those whose employer does not take out income tax? For example, those who are self-employed and other professions where a check is not coming from an employer, have the responsibility of making sure they pay the appropriate amount in taxes each year. These taxes are paid quarterly and are what’s known as estimated taxes.
How do I file Estimated Taxes?
Estimated taxes can be filed online with 1040-ES at https://www.irs.gov/pub/irs-pdf/f1040es.pdf and are required to be finished by today September 15th 2020. There are a number of ways to pay estimated taxes, including by check, cash, money order, credit card and debit card.
When are the next Estimated Tax payments due?
The next round of Estimated Tax payments is due on January 15th 2021 and covers the income period between September 1st-December 31st. You don’t have to make the payment due January 15, 2021, if you file your 2020 tax return by February 1, 2021, and pay the entire balance due with your return.
Will I get penalized if I don’t pay?
As you probably already know there is generally no way of getting out of paying the appropriate amount of taxes in a year. Estimated Taxes are no different and will concur a fine if not paid accurately and on time. Estimated taxes however does not incur a penalty if you owe less than $1,000 in taxes.