Jogeephus
Well-known member
Didn't want to hijack the capital gains thread but does anyone know what triggers you to have to pay quarterly taxes?
Another tax thread
- Thread starter Jogeephus
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Caustic Burno
Well-known member
Yes and no.Jogeephus":vis7wh1h said:
According to my CPA there is a formula that a percentage has to be paid in based on income. My understanding it is based off the previous years tax records. My understanding is limited here the way it was explained to me I could opt quarterly or monthly. Watched my dad play the quarterly game it was not good on his blood pressure so I just opted to have them paid monthly. Might be different in today's electronic age I remember him having to file a form with every payment.
HDRider
Well-known member
I think they are two different things..Bigfoot":1ab4h0tr said:
I always get dinged for not withholding enough from my bi-monthly check. I think it is triggered by a larger than "allowed" payment in on April 15th.
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Caustic Burno
Well-known member
I was on estimated have no clue what the trip to filing is other than the Feds want the taxes collected from us to be paid by the corporations.Bigfoot":3b0xpe4m said:
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Jogeephus
Well-known member
Bigfoot":2gdah1ss said:
Paying the estimated quarterly. Don't seem right to have to pay taxes on something before you even earn it. I don't care for this rule. Its almost like they are afraid I'll run off with my money to some tropical paradise before giving them money to buy obama phones.
I think, but am not sure if your going to owe $1000 or more they want it during the year. I hate taxes, but I don't mind paying quarterly. I don't miss it all in one chunk, and occasionally get some back.
artesianspringsfarm
Well-known member
Jo, while I dont like it, you arent paying on something you havent earned. Quarterly estimated's are supposed to be based off your rough previous quarters earnings. Just like an employee has their taxes pulled from their rough weekly or monthly earnings. Also, in answer to your original question from the IRS:
Question: How do I know if I have to file quarterly individual estimated tax payments?
Answer:
You must make estimated tax payments for the current tax year if both of the following apply:
You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
You expect your withholding and refundable credits to be less than the smaller of:
90% of the tax to be shown on your current year's tax return, or
100% of the tax shown on your prior year's tax return. (Your prior year tax return must cover all 12 months.)
There are special rules for:
Farmers and fishermen
Certain household employers
Certain higher income taxpayers
Nonresident aliens
Question: How do I know if I have to file quarterly individual estimated tax payments?
Answer:
You must make estimated tax payments for the current tax year if both of the following apply:
You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
You expect your withholding and refundable credits to be less than the smaller of:
90% of the tax to be shown on your current year's tax return, or
100% of the tax shown on your prior year's tax return. (Your prior year tax return must cover all 12 months.)
There are special rules for:
Farmers and fishermen
Certain household employers
Certain higher income taxpayers
Nonresident aliens
My mother paid every quarter as long as she lived. I paid it two quarters after she passed away. Never thought that was right. Last year she had to pay when she filed,even after paying the estimated.
Accountant told me this time that I won't have to file anymore. Kind of sad after all these years. She paid her share and a lot more for many years.
Accountant told me this time that I won't have to file anymore. Kind of sad after all these years. She paid her share and a lot more for many years.
TexasBred
Well-known member
I've never paid it. Pay waht I owe at the end of the year along with a small penalty.Jogeephus":2z12m5cd said:
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Jogeephus
Well-known member
artesianspringsfarm":2ga2xlmc said:
That may be the case but I don't think so. If they are basing it on what I made last year there is no guarantee I'm going to make that amount again so in my view I'm paying for money I haven't made.
For example, a few years ago I claimed no deductions and they zapped me good on my payroll income but in addition to this I had to pay a huge sum of money quarterly based on what I had made the previous year. That year was special. The moon and the stars had lined up in a unique way and I earned way above average and every dime I had after paying my monthly payroll taxes went to pay this quarterly tax which left me nothing.
Had my wife not been working we would not have been able to pay the light bill without going into savings. True, I got it all back but to me my getting it back just proves I paid taxes on money I did not earn. Just think how hard it would be to make ends meet if you were forced to work all year before you could draw a paycheck. It just doesn't seem right. After all, if I owed them money they would charge 1.5%/month but they got use of my money for a year interest free - well actually it was 18 - 19 months because of the lag time before getting the refund - and they didn't even send me a phone with the check.
Caustic Burno":2ga2xlmc said:
I think this is how it has applied to me. I don't think this is right. Tomorrow is promised to no one, nor am I guaranteed the same income as last year. No, its not good on my blood pressure but who am I to call what with me without an obama phone and all.
Commercialfarmer
Well-known member
For you Jo.
Commercialfarmer
Well-known member
Total pages in tax code 1907-400 pages
Total pages in the code 2016- 74,608 pages
Total pages in the code 2016- 74,608 pages
artesianspringsfarm
Well-known member
Jo, you CAN base it off last years quarterly income but you absolutely do not HAVE to. If your income has changed substantially, you just pay based off of what you are actually making. For me, I always pay my first quarterly estimated's based off of assuming 100% of last year's income, but then for every other quarterly payment I sit down with my CPA to get a rough idea where I am year to date and adjust accordingly. Quarterly taxes are not just you paying 25% of last year's taxes per quarter. They are made to be quarterly so that you can adjust based off of what you are actually making. I hope I'm being helpful but if your CPA has you doing it that way, maybe they have a reason.
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Jogeephus
Well-known member
artesianspringsfarm":25dx9bhp said:
You are being helpful and I appreciate your input. I didn't know you could adjust it. My problem is I know roughly what my salary will be but I never know what my income from my other things will be since I don't draw anything from this till the end of the year when everyone else has been paid. That is when I figure my total for the year. Like when cattle spiked I had no idea I'd bring in what I did till it was near the end of the year.
Seems like when I got hammered the worst I had delayed taking income till the beginning of the new year and the accountant said something about the IRS having a "look back" period and it was in this period is when I had an above average amount of income and this was used to figure the quarterly taxes for the year. Its probably my fault for not fighting this but I'd rather take it on the chin than argue with the IRS because I'd rather them leave me alone than butt heads with them.
I just wish we had a simpler tax code.
artesianspringsfarm
Well-known member
I agree with this so much. I always say that my CPA is the one guy I will pay with a smile on my face because of how much he saves me, but on the other hand, the fact that I have to pay someone to tell me how much I have to pay someone else still hurts. My return this year looked like a copy of War and Peace. It's truly disgusting.
SJB
Well-known member
Just the fact that there is an entire industry and white collar profession based off of understanding taxes, ought to tell anybody all they need to know about our tax system.
Jogeephus":1zlehp0y said:
Joe, I agree with Artesian. Just pay based on your current income and pay the penalty on your tax return. ? It's not as bad as the loss of your cash flow. You can also file form 2210 for forgiveness of penalty if your income changes drastically from yr to yr.
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Jogeephus
Well-known member
Thanks Bbirder. I'll see what I can't work out with the accountant. My accountant is good but sometimes I think he is too conservative and not aggressive enough but then again I like this about him too.
I just get frustrated with all this because it just doesn't seem fair to have to pay taxes on what I may or may not earn and have to wait till the dust settles before I get my money back.
I just get frustrated with all this because it just doesn't seem fair to have to pay taxes on what I may or may not earn and have to wait till the dust settles before I get my money back.
