Do I Need To Pay Estimated Tax Now Or April

[kpa0627]

I was reading somewhere that said if you think you are going to owe 1000 or more on taxes then you need to fill out the Form 1040-ES. After you fill that out it will tell you what you need to pay by January 18th. Or you do not have to pay it if you file by January 31st.

Well, I'm not going to be ready to file by January 31st. I assumed I could just turn taxes in by April 15th and pay what I owe at that point even if it is more than 1,000.

Do I need to fill out the Form 1040-ES or can I just wait and turn in my taxes mid April and then just pay at that point if I owe.

This was my first year doing daycare at home so I wasn't paying in quarterly or anything... I just thought I could wait until the end and if I owe I will use my savings to pay.

[Lilbutterflie]

Tom Copeland wrote a helpful article about taxes recently on the daycare.com website & it does speak briefly about this. Here is the link:

https://www.daycare.com/news/taxes/tom-copeland.html

Hope this helps!

[Lilbutterflie]

Hmmm, just read the article again & the info I was looking for wasn't in there. I know I read it somewhere! Maybe on his website. But what I read was to the effect of taking into account if you have a spouse, whether you are filing joint or single, and if your spouse is withholding for federal taxes.

Hopefully Tom will chime in here.

[TomCopeland]

Estimated Taxes

The IRS rules state that you pay in at least 90% of the taxes you owe each quarter or else there is a penalty. There are several ways you can avoid paying a penalty:You will get a tax refund; if you owed no taxes last year, or if the taxes you withheld in 2010 are greater than the taxes you paid in 2009; or you will owe less than $1000 in taxes in 2010.

So, if you haven't paid in enough for 2010 you should file the estimated tax form - 1040ES - by January 18th to reduce the penalty you will owe for the last quarter of the year. There is no January 31st deadline to worry about. If you can't cope with meeting the January 18th deadline and you file your taxes by April 18th then you probably will owe a penalty.

Hope this helps answer your question.

[JeepGirl6]

Tom

The IRS rules state that you pay in at least 90% of the taxes you owe each quarter or else there is a penalty. There are several ways you can avoid paying a penalty:You will get a tax refund; if you owed no taxes last year, or if the taxes you withheld in 2010 are greater than the taxes you paid in 2009; or you will owe less than $1000 in taxes in 2010.

So, if you haven't paid in enough for 2010 you should file the estimated tax form - 1040ES - by January 18th to reduce the penalty you will owe for the last quarter of the year. There is no January 31st deadline to worry about. If you can't cope with meeting the January 18th deadline and you file your taxes by April 18th then you probably will owe a penalty.

Hope this helps answer your question.

I have added up all of my income from my daycare and I will be claiming taxes on about $14,000 without deductions. I was never told to do taxes quarterly because I was not making enough...so I hope this not does effect me tremendously. With my deductions I am put under the poverty level of $10,000 so does this mean I won't owe anything? Should I start paying quarterly for 2011? Thanks

[TomCopeland]

Estimated taxes

You potentially owe two types of federal taxes: Social Security tax and income tax. You will always owe 15% of your business profit in Social Security taxes. If you are low income enough you may not owe any federal income taxes, but you will always owe the Social Security taxes.

So, you should probably file Estimated taxes for the fourth quarter of 2010 by January 18th, and you should definitely file estimated taxes for 2011.

[JeepGirl6]

Tom

You potentially owe two types of federal taxes: Social Security tax and income tax. You will always owe 15% of your business profit in Social Security taxes. If you are low income enough you may not owe any federal income taxes, but you will always owe the Social Security taxes.

So, you should probably file Estimated taxes for the fourth quarter of 2010 by January 18th, and you should definitely file estimated taxes for 2011.

It says on the 1040-ES form that if you make less than $1,000 for 2010 taxes with your deductions I would not have to file quarterly for 2010. Now is this $1,000 for just Federal? or both Federal and S.S together? I have calculated that I will probably have to pay around $800-$1,000 for S.S...If all together with S.S and Federal, if it falls below the $1,000 owed I won't get penalized correct? I don't have every deduction calculated yet... I don't think I will owe anything for federal since I will fall below poverty which is $10,830 for 2010 Poverty Guidelines

[TomCopeland]

Estimated Taxes

The $1,000 limit includes both Social Security taxes and federal income taxes. You wouldn't have to worry about filing quarterly estimated federal taxes if you owe less than $1,000 in taxes. Your taxes are based on your business profit (income minus business deductions) x 15.3% for Social Security/Medicare taxes (always due as long as your profit is above $400) and whatever federal income tax you will owe on your profit (perhaps nothing).