The IRS will ALWAYS give you the benefit of the doubt the FIRST YEAR
ONLY. In fact, according to the rules the need to file quarterly only
kicks in IF you owed more than $1,000 the previous year... You generally
won't be penalized if you fail to file at the end of the first quarter
if you haven't filed your taxes for the previous year yet because you
may not even know you owe more than $1,000 (this is not law just the IRS
guidelines). They may access the penalties but they will always waive
them if you talk to them (nicely).
What you should do is figure out the rough amount you would owe just
before the end of the year... and send them enough money to make sure
you owe less than $1,000 when you file the taxes. If you do that, you
will never trigger the requirement to file quarterly and it saves you a
bunch of work. Again.. this is not law... but it is how it works.
For what it's worth.. I'm not an accountant (but then most accountants
actually know VERY LITTLE about taxes).. but I did operate a rather
large income tax franchise for several years, and I've only met one
accountant who knew more about U.S. taxes than I did, compared to about
200-300 who knew a lot less.
In general... if you do use an accountant, get one who specializes in
business taxes. A normal accountant just does not know much about
them... even if they tell you they do. When I had the tax franchise,
every year we would get 40-50 customers coming in and we would have to
file amendments to their previous years taxes because the accountants
had done such a lousy job. In one case, we amended the previous 3 years
and got a woman over $50,000 back after her accountant screwed it up so
badly.
Sincerely,
Brad Gies
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Everything in moderation, including abstinence (paraphrased)
Every person is born with a brain... Those who use it well are the successful
happy ones - Brad Gies
Adversity can make or break you... It's your choice... Choose wisely - Brad Gies
Never doubt that a small group of thoughtful, committed people can
change the world. Indeed. It is the only thing that ever has - Margaret Mead
On 21/01/2011 12:14 PM, DanH wrote:
Basically, if you make enough that you'd end up owing the tax man more
than an nominal sum at the end of the year, you need to make estimated
income tax payments. However, if you have a "day job" that has
regular withholding, you can probably up the amount of withholding
(eg, declare fewer exemptions on your W4) and not have to make the
separate payments. Also, the IRS gives you something of a grace
period for your first year (though the rules on that are kind of
fuzzy).
In my case I have to make estimated state tax payments on my 1099
income, but my federal is covered by the withholding from my pension.
Using something like TurboTax is a good idea. Generally it will lead
you through all the right steps (although the recent year versions
have gone overboard on "guiding" you, to the point that you sometimes
want to drop-kick the whole thing).
On Jan 21, 10:39 am, TreKing<treking...@gmail.com> wrote:
On Fri, Jan 21, 2011 at 10:36 AM, Justin Giles<jtgi...@gmail.com> wrote:
Also, for those who have made any significant amount of income, you should
probably be making quarterly payments throughout the year, or risk
additional fees at the end of the year.
Can you define "significant" for those of us whose eyes glaze over at the
mean mention of doing taxes?
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TreKing<http://sites.google.com/site/rezmobileapps/treking> - Chicago
transit tracking app for Android-powered devices
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