Estimated Tax Payments Due Soon (Q2 2013)

by Michael on Jun 7, 2013

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As we head into the weekend, I just wanted to remind you that estimated tax payments for the second quarter of 2013 are due in ten short days — on Monday, June 17th (the 15th falls on a Saturday). So why not set aside a few minutes this weekend to get this knocked out before you forget?

If you’re not sure what this is all about, estimated tax payments most commonly apply to the self-employed, those with significant investment earnings (hopefully that’s a lot of you), and anyone else with a decent chunk of income that isn’t subject to withholding. In short, these quarterly payments help to protect you against the possibility of underpayment penalties at the end of the year.

If you use a tax pro or halfway decent tax prep software, then you’re likely aware of your liability (if any). If not, you can run the numbers yourself (and submit payment) using IRS Form 1040-ES, which walks you through the entire process.

The short version is that you can use your previous year’s income as a guide, adjust for any anticipated changes, and then figure your (estimated) taxes by applying current income tax rates and account for things like Social Security and Medicare taxes as well as the (possible) net investment tax.

Depending on the size of your tax liability vs. last year’s tax bill as well as the amounts you’re having withheld, you may need to make quarterly payments to avoid underpayment penalties. The first installment is due with your income tax return for the preceding year (on or near April 15th). The subsequent installments are due in mid-June, mid-September, and then mid-January of the following year.

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