June 9th, 2021 Brad Hennebert
Estimated tax payments for second quarter are coming up due on June 15th, 2021. If you are not accustomed to making estimated tax payments, the following is for you!
Estimated tax payments cover tax on income not subject to withholding, such as income from self-employment, gains from the sale of assets, and more. You may also have to pay estimated tax if the amount being withheld from your salary isn’t enough.
Your tax preparer should have provided you a Form 1040-ES if they found you likely will owe $1,000 or more in taxes in the coming year. You can also use the use the Interactive Tax Assistant or read Publication 505 from the IRS.
You will get an underpayment penalty. Really? Yes, really! Owe less than $1,000 at tax deadline, or pay at least 90% of what’s expected throughout the year and you may avoid this. If you make inconsistent income (such as realtors), have your tax preparer estimate and/or help with installment payment methods. If you are a W-2 employee, update your employer withholding with your HR/payroll service.
Mail your payments with the 1040-ES coupons your preparer gave you, use IRS Direct Pay or pay on IRS.gov. Still have questions? Call us to set up an appointment with a team member, and we can help you!