TAX-SAVING STRATEGIES November 13
When Are Estimated Tax Payments Due?
Taxpayers can explore payment options anytime of the year
by Dean Ferraro, EA
The IRS understands that taxpayers who owe money need choices on how they can make payments to the agency.
I advise my clients to who are self-employed to pay the IRS as soon as they are paid. Also don't forget your State taxes too. (if neccessary)
The calculation to figure out how much you should pay from every payment you receive is different for every taxpayer. A good place to start is last year's return, how much tax was assessed on your income? Divide your taxes by your taxable income -that's your percentage to send in...
Also, a pre-tax retirement contribution can be made prior to this as well, which will lower your taxable income and the amount needed to remit to the IRS AND State, (don't forget to include your State taxes, if necessary).
So now you know what you owe, time to pay up...
IRS offers three easy ways to pay taxes.
- pay online,
- by phone or
- with their mobile device using the IRS2Go app.
Here's some more helpful info:
Any time of the year is a good time for you to explore these payment options.
Additionally, some taxpayers must make quarterly estimated tax payments throughout the year. This includes sole proprietors, partners, and S corporation shareholders who expect to owe $1,000 or more when they file.
Individuals who participate in the sharing economy might also have to make estimated payments. Uber, Airbnb, Etsy, eBay.
Here are four options for taxpayers who need to pay their taxes.
- Pay when they e-file using their bank account, at no charge from the IRS, using electronic funds withdrawal.
- Use IRS Direct Pay to pay their taxes, including estimated taxes. Direct Pay allows taxpayers to pay electronically directly from their checking or savings account for free. Taxpayers can choose to receive email notifications about their payments. The IRS reminds taxpayers to watch out for email schemes. IRS Direct Pay sends emails only to users who requested the service.
- Pay by credit or debit card through a card processor for a fee. Taxpayers can make these payments online, by phone, or using their mobile device with the IRS2Go app.
- Make a cash payment at a participating 7-Eleven store. Taxpayers can do this at more than 7,000 locations nationwide. To pay with cash, visit IRS.gov/paywithcash and follow the instructions.
Can't afford to pay your taxes? Don't worry it can happen to anyone.
Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.
For a full menu of payment options, taxpayers can visit IRS.gov/payments.
But before you pay, give me a call and let's go over your case. You could be overpaying and not even realizing it, especially if you self-prepared the tax returns.