The first quarter due date for estimated tax payments to the Internal Revenue Service (“IRS”) is fast approaching, and will be here on Tuesday, April 18, 2017. It is important for individuals and business owners to review their tax situation and make this initial payment using the appropriate forms.
The IRS requires the withholding and pre-payment of at least 90 percent of your current tax obligation, or 100 percent of last year’s federal tax obligation throughout the tax year. This can be determined by looking at last year’s tax return and creating projection of this year’s obligation. This way it can be determined if any additional amounts are due in addition to what is being withheld from any paychecks.
There are various additional considerations to keep in mind, especially, if you do not have proper tax withholdings throughout the year, an underpayment penalty could apply. This accentuates the importance of evaluating your tax situation at this time. Self-employed individuals must also remember to account for the need to pay Social Security and Medicare taxes as well.
If you are not sure if you need to make a quarterly estimated tax payment, or need help determining if any amounts should be paid in addition to your paycheck withholdings, you should consult a tax professional. The attorneys at Bivins & Hemenway, P.A. can assist you in connecting with a local tax professional that can suit your individual needs.