Estimated Taxes – What Are They?

Estimated Taxes – What Are They?

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Estimated Taxes – What Are They?

If you receive any taxable income, you must pay taxes. Those who are employed usually have their taxes withheld from their paychecks; however, for others, they must pay the IRS directly. Usually those individuals include self-employed, independent contractors, or individuals who receive income from other sources. For those people, that is where estimated taxes come into play.

First, what are estimated taxes?
Simply put, estimated taxes are a method of paying your taxes on income you receive that’s not taxed during the year, as long as it exceeds $1,000. Estimated taxes are paid quarterly with generally the following payment schedule that may change year to year based on weekends:

  • 1st quarter deadline April 15th
  • 2nd quarter deadline June 15th
  • 3rd quarter deadline September 15th
  • 4th quarter deadline January 15th

How do you pay them?
Generally, if you have an accountant handle your taxes, they can set up your estimated taxes payments. If you are looking to figure them out on your own, IRS Form 1040-ES (Estimated Tax For Individuals) is the form you want to use to calculate what your tax payments are going to be. The form will guide you through how to figure out any estimated taxes, but you will need to be prepared with your income, deductions, credits and paid taxes. A simple way to do this is by using what your numbers were last year. Unless there are major changes in your life, this will be a great way to gauge what your income will be next year. If you find that you overpaid on your estimated taxes, you will just receive the excess amount in refund form.

Here at A. Mazzo Accounting Services, we can help you with all of your accounting needs, including determining what your estimated taxes will be. Give us a call today, with any assistance you may need!

A Mazzo Accounting provides a variety of tax and accounting services to individuals and businesses in the Wyomissing, Reading, West Reading, Sinking Spring and Kenhorst areas, as well as towns and villages around the Greater Reading area. Our services for small to mid-size businesses include taxes, payroll services, accounting services, and bookkeeping services. We also provide a variety of services for individuals and they include tax return preparation as well as some accounting assistance.