How Do You Calculate Estimated Tax Payments To Avoid Paying Penalties To The IRS?
Learn how to make estimated tax payments to the IRS to avoid paying penalties. This is especially important for people who have income from self-employment, such as money from a blog or writing e-how articles. For calendar-year individuals, required quarterly payments are due by April 15, June 15, September 15 and January 15 of the following year. To avoid an underpayment penalty, total tax payments must equal or exceed any of the following “safe harbor” rules. Pay 90% of the tax liability for the current years return Pay 100% of the tax liability from the prior year return if the taxpayers Adjusted Gross Income (AGI) was less than $150,000 Pay 110% of the tax liability from the prior year return if the taxpayers Adjusted Gross Income (AGI) was more than $150,000 No penalty is imposed if the estimated tax for the current year is less than $1,000 or the individual had no tax liability for the prior year. Also, the penalty is enforced only if you do not pay, not for failing to file.
