Estimated Taxes: Answering Your Questions #
Many individuals have questions about estimated taxes. Here are some common queries and their answers:
Q: What are estimated taxes? A: Estimated taxes are periodic payments made by individuals or businesses to the government to fulfill their tax obligations throughout the year.
Q: Why do I need to pay estimated taxes? A: If you have income that is not subject to withholding taxes, such as self-employment income or investment earnings, you may be required to pay estimated taxes to avoid penalties at tax time.
Q: How do I calculate and pay estimated taxes? A: You can calculate your estimated tax liability using Form 1040-ES or consult a tax professional. Payments can be made online, by phone, or by mail.
Q: When are estimated tax payments due? A: Estimated tax payments for the current tax year are typically due on April 15, June 15, September 15, and January 15 of the following year.
Q: What happens if I don’t pay estimated taxes? A: If you don’t pay enough estimated tax throughout the year, you may be subject to penalties and interest on the unpaid amount when you file your tax return.
Remember, it’s important to consult with a tax professional or the IRS to ensure you are fulfilling your estimated tax obligations accurately and on time.