Many people who are self-employed do not realize how estimated payments work, or may not even know they need to be paying them in each quarter.  If you read my article on Part I and thought, oh, I will just pay my taxes when I file my return...that is how people end up coming to see me.  They truly intend to pay their taxes, and think it is just easier to just do it all at once.  Okay, that may work for some, but for many that is exactly the mind-set that gets people into tax troubles... 

I have seen it time and time again...you plan on that one completed job paying-out right around the time taxes are due, and then that falls through...(probably because they have taxes due, too) so now you don't pay your taxes.   You never set any money aside...you never planned on this happening...so much for paying when you file!  Oftentimes when people don't have the money to pay their taxes when the taxes are due, people don't file at all!  That's the worst thing you could do; but that is another story...  

Did you know that even though you may fully intend to pay your taxes when you file your 1040 tax return, you are actually charged a penalty for not pre-paying the tax?  That's right; if the IRS thinks you need to be paying in quarterly, and you don't pay in, they hit you with another one of their many penalties.  Just another reason why it is best to make quarterly payments instead of waiting until April 15th

Now, I'm not here to scold you or badger you for not paying estimated payments if you are self-employed.  I'm here to help and I take pride in sharing with the public helpful information which the IRS may have neglected to share.  Call me today for a free tax consultation.  What have you got to lose?

 

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