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I would like to know what are the reasons for paying estimated tax payments. I was told that it has to do when you're self employed, but I never was self employed and always paid my taxes. I saw this voucher recently on an old tax return that a I did online a few years back but I have never received a notice of due payments/late payments
If you are self employed and paid as a 1099 worker, you don't get taxes taken out. If that is your only source of income you are suppose to pay estimated taxes quarterly or you can be penalized.
If you are self employed and paid as a 1099 worker, you don't get taxes taken out. If that is your only source of income you are suppose to pay estimated taxes quarterly or you can be penalized.
Even if you are not self-employed you may have to pay estimated taxes if your NY State withholding is significantly less than your total taxes. There are some safe harbors to avoid penalties on underpaid taxes.
It's at the end of your NY State tax return. There are penalties for underpaying your taxes throughout the year.
Even if you are not self-employed you may have to pay estimated taxes if your NY State withholding is significantly less than your total taxes. There are some safe harbors to avoid penalties on underpaid taxes.
It's at the end of your NY State tax return. There are penalties for underpaying your taxes throughout the year.
For federal, state and local taxes there are serious consequences for under withholding. If it happens too often (as in once, *LOL*) you will get some sort of notice about making quarterly estimated tax payments.
Tax payments are due on a timely basis. For income taxes for those employed by someone else this isn't a problem because employer deducts and sends sums onto IRS, state and local revenue collection agencies. This is where that "exemptions claimed for withholding" on W-2 forms comes in.
Many actually do not claim proper exemptions and thus get either refunds or owe . A refund just means you loaned federal or state/local government money interest free for one year. Owing means you short changed government for tax revenue and they want their money, often with interest and or penalties.
You don’t need to file estimated taxes for NY if you meet the following criteria.
Quote:
You do not need to pay estimated tax if:
You expect to owe less than $300 of New York State, $300 of New York City, and $300 of Yonkers income tax after deducting tax withheld and credits that you are entitled to claim.
You expect your tax withheld during 2020 to be at least:
90% of the tax shown on your 2020 return
100% of the tax shown on your 2019 return
Federal Taxes:
No matter what state I live in I will always pay the same Federal Taxes.
A fixed amount of Federal taxes are taken out of my check automatically every month.
State Taxes:
Some States are retirement friendly others are not.
This number varies by state so an exact amount can not be taken out of
my check per month. This only confuses accounting if I were to move
from state to state.The responsibility becomes mine. I use 10% of my gross
income for my yearly State Taxes Due as my rule of thumb. I can apply up
to 12% if it makes me feel safer or talk to an accountant for greater accuracy.
As a retired New Yorker I must pay estimated State Taxes 4 times a year.
I get some of it back at the end of the year when I file my taxes.
The 10% rule has always worked for me...
Hope this helps.
Last edited by Mr.Retired; 06-20-2020 at 08:48 PM..
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