Estimated tax is the method
used to pay tax on income that is not subject to withholding. This includes
income from self-employment, interest, dividends, alimony, rent, gains from the
sale of assets, prizes, and awards. You also may have to pay estimated tax if
the amount of income tax being withheld from your salary, pension, or other
income is not enough.
Estimated tax is used to pay
both income tax and self-employment tax, as well as alternative minimum taxes
and other taxes and amounts reported on your tax return. If you do not pay
enough tax, either through withholding or by making estimated tax payments, or a
combination of both, you may be charged a penalty. If you do not pay enough by
the due date of each payment period (see When To Pay Estimated Tax, later), you
may be charged a penalty even if you are due a refund when you file your tax
return.
WHO MUST PAY
ESTIMATED TAX PAYMENTS?
If you owe additional tax for
2016, you may have to pay estimated tax for 2017. General rule. You must make
estimated tax payments for 2017 if both of the following apply.
1. You expect to owe at least $1,000 in tax for 2017 after
subtracting your withholding and refundable credits.
2. You expect your withholding plus your refundable credits to
be less than the smaller of:
• 90% of the tax to be shown on your 2017 tax return, or
• 100% of the tax shown
on your 2016 tax return. Your 2016 tax return must cover all 12 months.
CALL US
FOR A FREE TAX CONSULTATION
(212)
974-3435
Selig & Associates provides the most
aggressive tax representation allowed by law. Specializing in Trust Fund
Recovery Penalty (TFRP) representation, and all payroll, income and sales tax
controversies. We settle contested tax audits; negotiate excellent payment
plans, compromise tax debts, and resolve all civil and criminal tax issues,
including innocent spouse relief and separation of liability.
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