How to pay your estimated taxes quarterly

As the IRS says: "The income tax in the United States is a tax pay-as-you-go". This means you earn income, you must pay taxes on it. Unfortunately, you can not just wait until you to pay your tax return file all at once. The government makes it easy for employees to pay as they go through deduction of taxes and wages directly from your paycheck.

Contractors and independent business owners, however, these taxes need (usually quarterly) submit regularly.

If you pay enough is not during the tax year, you may have a penalty if you leave your tax return. According to the IRS, "most taxpayers to avoid this penalty if they owe less than $ 1,000 in taxes less deductions and credits, or if you pay for the current year or 100% at least 90% of the tax tax on the return for the previous year "shown (emphasis added).

If you are paying an independent contractor quarterly estimated taxes, write a check to the federal government and possibly your state government (state laws that may differ from the federal law) at least four times per year. (Although if you want to send money electronically, you can use to send EFTPS government payments.)

How can I pay estimated taxes?

It's a complicated question, because the tax status of each varies. The easiest way is to understand, to take what I had in taxes last year, divided by four, to make payments on that amount or add this amount to the quarterly payment in the last year and to pay every 3 months . However, if your income is likely to change from one year (as is often the case with independent contractors), you could stop paying above or below. Maintaining a close account of their income and pay their tax payments accordingly can help you to avoid a penalty. See this example of an independent contractor estimated quarterly taxes.

However, tax planning is more than that; Equally important the planning is not only for what you pay, but how to save the money to pay these taxes, without draining their savings accounts, or worse, contract debts.

These 4 tips to save on taxes, can not pray Connect A prayer, or at least reduce the stress of tax season, which surprises.

_{Disclaimer
I am not a lawyer for tax preparation, accountant or tax advisor. The information presented here as a general guide. For specific questions about your own taxes, see IRS publications or consult a tax advisor.}