Estimated IRS Taxes

What are Estimated IRS Taxes?

The IRS requires you to pay taxes on income that you receive throughout the year. If you are employed, your employer pays your taxes through withholdings. If you are in self-employed, you will need to make estimated tax payments. Estimated Taxes are used to pay income tax, self-employment tax and alternative minimum tax according to the IRS.

You may be charged a penalty if you fail to pay enough tax through your estimated tax payments. This penalty still applies, even if you are due a refund when you file your taxes at the beginning of the year.

Estimated tax requirements are different for occupations such as farmers and fishermen, therefore it is imperative that you have a trusted tax professional estimate your taxes. 

Who is required to pay Estimated Taxes?

Sole proprietors, partners, and S corporation shareholders are required to make estimated tax payments if they expect to owe tax of $1,000 or more when they file their tax return.  However, Corporations are required to make estimated tax payments if they expect to owe tax of $500 or more when their return is filed.

How to determine Estimated Taxes

Your tax professional will use the required IRS forms to determine your estimated tax. They will use your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year to determine your estimated taxes. 

To avoid penalties, it is always best to have a tax professional that you can trust to accurately estimate your income. Call Morgan, Daggett, Wotman, LLP Home of Tax Champions today for a FREE consultation on your estimated taxes.

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Walter Wotman, CPA

Founder & Managing Partner

Walter Wotman, CPA is the author of "Tax Champions Guide to Tax Resolution." Amazon #1 Best Seller in the Personal Finance category. He is one of America's most experienced tax negotiators with over 35 years of experience helping thousands of clients settle difficult back tax issues.
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