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Tip of the Day Consider Community College or Online College For Your First Year or Two

Consider Community College or Online College For Your First Year or Two - If you are finding you need the education but don't have the funds, or want to take...

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Estimated Tax Forms

"Estimated tax is the method used to pay tax on income that is not subject to withholding," says the IRS. "This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough."

Estimated tax can be used to pay income tax and self-employment tax. It is also used to pay other taxes reported on your tax return.

If you had a tax liability or owed money on your taxes in 2008, you may have to pay estimated tax in 2009.

As a general rule, you will be required to pay estimated tax for 2009 if two conditions apply to you: you anticipate owing at least $1,000 in taxes for 2009, after subtracting your withholding and credits; and "you expect your withholding and credits to be less than the smaller of 90% of the tax to be shown on your 2009 tax return, or 100% of the tax shown on your 2008 tax return. Your 2008 tax return must cover all 12 months," says the IRS.

Generally, sole proprietors, partners, and S corporation shareholders need to make estimated tax payments if they anticipate owing more than $1,000. The IRS recommends using Form 1040-ES, Estimated Tax for Individuals, to calculate and pay your estimated tax. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.

Corporations must make estimated tax payments for the corporation if they expect to owe more than $500 in taxes. Corporations should use Form 1120-W, Estimated Tax for Corporations, to calculate the estimated tax. You must deposit the payments. For additional information, refer to Publication 542, Corporations.

"If you receive salaries and wages," says the IRS, "You can avoid having to pay estimated tax by asking your employer to take more tax out of your earnings. To do this, file a new Form W-4 with your employer. There is a special line on Form W-4 for you to enter the additional amount you want your employer to withhold."

According to the IRS, certain individuals with small businesses are eligible for smaller estimated tax payments. "If you qualify," says the IRS, "Your required annual payment for 2009 is the smaller of 90% of the tax shown on your 2008 tax return or 90% of the tax shown on your 2009 tax return. You must check box F in Part II on Form 2210 or box C on Form 2210-F to certify that you qualify."

Discuss It!

richard Kett said:

please say where to mail

richard Kett said:

old folks will never get this right-i anm one of the old folks

richard Kett said:

why not give us the forms and say where to mail

Going Here said:

I need to express fundamental appreciation for this post. I will bookmark this post i return future.

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Definition of the Day Date of Payment

Date of Payment - a date of payment is a term for the date a payment on a dividend on a stock, a distribution of a mutual fund, or a bond interest payment is made or is scheduled to be made. It?s also known as the distribution date or simply...

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