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Paying the Correct Amount of Estimated Quarterly Taxes

Posted on in Taxation Law

San Jose, CA quarterly tax payment attorneyIf you have to pay estimated quarterly taxes, it is critical to pay the correct amount. Underpaying can result in a penalty, and overpaying gives what is essentially an interest-free loan to the government that cannot be recouped until a return is filed.

This is especially true in light of the Tax Cuts and Jobs Act of 2017, which substantially changed income taxes. The law altered the tax brackets and tax rates for individual or married taxpayers, made changes to the allowable deductions for business expenses, increased the standard deduction and child tax credit, took away personal exemptions, and limited or ended other deductions. Because of this, many taxpayers will need to adjust the amount of the taxes they remit each quarter via estimated tax payments. 

Who Must Pay Estimated Quarterly Taxes?

Typically, taxpayers have to make estimated tax payments if they expect to owe tax of $1,000 or more when their returns are filed. One common category of taxpayers who should pay estimated quarterly taxes are people who are self-employed. In addition, investors and retirees often need to make these payments because they have a substantial portion of income that is not subject to withholding. Other income that is typically not subject to tax withholding includes interest, capital gains, stock dividends, alimony or spousal support, and income from rental property.

When Are Quarterly Taxes Due?

Payments for the January 1 to March 31 quarter are due April 15; for April 1 to May 31, taxes are due June 15; for June 1 to August 31, taxes are due September 15; and for September 1 to December 31, taxes are due January 15 of the following calendar year.

When these dates fall on a holiday or a weekend, the due date moves to the next business day. For 2019, the due dates are as follows:

  • Q1: Monday, April 15, 2019
  • Q2: Monday, June 17, 2019
  • Q3: Monday, September 16, 2019
  • Q4: Wednesday, January 15, 2020

Payments can be made online or by check sent via mail.

Call a San Jose, CA Income Tax Lawyer

You should not operate under a cloud of uncertainty when it comes to the amount you owe in quarterly income taxes. While it may help to conduct a paycheck checkup by using the IRS Withholding Calculator, as the IRS advises, some situations are more complex and require the assistance of a trained tax professional.

Our firm has helped many people understand the tax laws that apply to them and develop a tax strategy that complies with the law and is workable for the taxpayer. Call our trusted San Jose estimated quarterly tax attorney today at 408-866-1810.

Sources:

https://www.irs.gov/newsroom/estimated-taxes-form-and-publication-can-help-people-pay-the-right-amount-in-2019

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