Estimated Tax Payments Due Soon (Q3 2013)

by Michael on Sep 15, 2013

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Yikes. I nearly forgot. Estimated tax payments are due tomorrow (Monday, Sept 16th). And there’s not much I can do about it since I’m currently out of the country.

Oh well, I’ll just have to send them in a little late. It’s not the end of the world. Really, it isn’t. There’s a decent chance the IRS won’t even notice. In the mean time, though, I want to encourage you to submit your payments.

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 others with income that isn’t subject to withholding.

If you use a tax pro or just about any halfway decent tax prep software, 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.

The short version is that you can use last 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 your tax liability vs. last year’s tax bill (and how much you’re having withheld), you may need to make these payments to avoid underpayment penalties. The 1st installment is due with your return for the previous year (April 15th), with subsequent installments due in mid-June, mid-Sept, and mid-Jan of the next year.

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