September 13, 2012
Occasionally, I write about tax topics for other business sites. Below is a preview of an article I wrote for Create Hype.
Estimated taxes for the third quarter of 2012 (June 1 to August 31) are due on September 17, so now is the time to gather your income and expense documents and start calculating!
What are Estimated Taxes?
Estimated tax payments are used to pay taxes on income not subject to withholding. Anyone who has been an employee of someone else has seen the amounts taken out of his or her paycheck for tax purposes. Part of this is your income tax withholding. The IRS requires employers to retain, or withhold, amounts from paychecks to cover the employee’s income tax liability.
This situation is slightly different for people who are self-employed. As there is no employer to withhold income from paychecks, self-employed individuals are required to submit their own withholdings quarterly.
Continue reading “A Deeper Look at Estimated Taxes”
Posted in Concerns for all Taxpayers, Estimated Taxes | Tagged entrepreneur, estimated taxes, guest post
June 13, 2012
Estimated Tax payments for the second quarter are due on Friday, June 15, 2012. Typically, individuals who are employed by someone else have this amount withheld from their regular paychecks. However, if you are self-employed in any capacity (full- or part-time), you may owe Estimated Taxes.
It is important to take the time each quarter to evaluate whether or not you will owe. The following flowchart – adapted from IRS Publication 505 – should help.
What is “income tax withholding”? In the flowchart above, income tax withholding is the amount of your wages that are withheld by your employer. This applies primarily in situations where an individual is an employee of someone else and self-employed. If your employer is withholding an appropriate amount of income, you may not owe Estimated Taxes.
Posted in Concerns for all Taxpayers, Estimated Taxes | Tagged estimated taxes, quarterly, tax |
