topic Re: Why file quarterly? in Self employed

Why file quarterly?

PS96 — Wed, 30 Aug 2023 18:50:52 GMT

What is the benefit to filing quarterly vs. annually?

Re: Why file quarterly?

xmasbaby0 — Wed, 30 Aug 2023 18:52:11 GMT

If you expect to owe at least $1000 at tax time in April, then paying quarterly amounts will help you avoid an underpayment penalty.

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

Re: Why file quarterly?

VolvoGirl — Wed, 30 Aug 2023 18:53:36 GMT

So you don't end up owing a lot on your tax return and get hit with a penalty.

You must make quarterly estimated tax payments for the current tax year if both of the following apply:

- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:

90% of the tax to be shown on your current year’s tax return, or

100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).

To prepare estimates for next year you start with your current return, but be careful not to change anything. For Online returns, if you can't get back into your return, Click on Add a State to let you back into your retun.

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

Or Go to….

Federal Taxes or Personal (Desktop H&B)

Other Tax Situations

Other Tax Forms

Form W-4 and Estimated Taxes - Click the Start or Update button

Re: Why file quarterly?

JandKit — Wed, 30 Aug 2023 18:57:04 GMT

Hi P596! That is an excellent question. Here is what the IRS thinks:

If you are required to make quarterly payments and miss the deadline for making a payment, the IRS will charge you a penalty. Even if you are only a day late, they will penalize you for underpaying your taxes.

The IRS requires that all taxpayers pay taxes when required

4 dates are allowed:

4-18-2023

6-15-2023

9-15-2023

1-16-2004

If payments are made timely and the proper amount is submitted, There is no penalty!

Good luck in the coming year!

Re: Why file quarterly?

TimS5 — Wed, 30 Aug 2023 19:03:41 GMT

There are two primary reasons to file quarterly tax estimates. The primary and most important one is to avoid an underpayment penalty. There are exceptions to the penalty, such as you owe less than $1,000, you paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less. The second reason is to avoid owing a large amount of tax when you file your tax return. If you owe a large amount of money at the time of filing and can not pay it, you will also incur penalties.