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@Carl wrote:At tax filing time, if what you owe the IRS is more than $1000 or more than 10% of your total tax liability (whichever is *HIGHER*) then an underpayment penalty will be assessed.
If you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.
See https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
Send in an estimated payment now.
Here are the blank Estimates and instructions…..
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
The 1040ES quarterly estimates are due April 15, 2020, June 15, Sept 15 and Jan 15, 2021. The first quarter is not due until July 15 this year. Your state will also have their own estimate forms.
Or you can pay directly on the IRS website https://www.irs.gov/payments
Be sure to pick the right kind of payment and year.....2020 Estimate
Are you self-employed? If so, then you should be sending the IRS quarterly payments each tax year. A prior message in this thread already provided the due dates for each quarter.
Now while the IRS does provide worksheets (also included as part of the TTX program) I have found this in my personal experience (I'm self employed too) to be a waste of time, effort and resources. If you just send the IRS 20% of your ****GROSS**** business income each quarter, then come tax filing time you'll be fine.
As it stands now, you are probably going to incur a late payment penalty for the first 3 quarters of 2020 no matter what you do. But I would recommend at a minimum, a "catch up" payment immediately (like today, right this minute) to stop the accumulation of those penalties.
Your forth quarter payment for 2020 is due Jan 15, 2020 and I generally try to pay my 4th qtr taxes before Xmas each year. Makes my book keeping simpler of all expenses for a tax year are "actually paid" in that tax year.
At tax filing time, if what you owe the IRS is more than $1000 or more than 10% of your total tax liability (whichever is *HIGHER*) then an underpayment penalty will be assessed.
@Carl wrote:At tax filing time, if what you owe the IRS is more than $1000 or more than 10% of your total tax liability (whichever is *HIGHER*) then an underpayment penalty will be assessed.
If you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.
See https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
And I even had a penalty one year when I was getting a REFUND. For not paying in evenly during the year.
you can avoid an underpayment of estimated tax penalty.
You would need to do a trial tax return, or do the 2210 form and AI Schedule manually ( not so easy), to determine how large your estimated payment should be.
Note: you need TurboTax CD.Download to do trial tax returns.
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