Estimating Income Tax
As the creator of a business you will be subject to a unique program of taxation which will almost always include the paying of what is known as “estimated tax.” Stemming from items like interest, rent, assets or prizes, estimated tax is made up of non-withholdable income. Though not all business owners will have to pay, most do. Basically, if you’re expecting to owe more than $1000 in taxes then you’re involved. The portion which is claimed for estimated tax can be used to pay one’s self-employment or income tax as well, but you have to be careful. Pay too little, even if you have a refund coming later in the year, and you’ll be legally reprimanded. Filing estimated taxes can certainly be a hassle, as can filming any tax forms. That’s why we at AFS Taxsavers are so happy to offer our assistance.
What is Estimated Tax Exactly?
- Generated by the existence of any and all income which was not able to be withheld. Basically, the amount is calculated by considering your gross income, your taxable income, your credits over the fiscal year and the deductions you made.
- Can be used to pay your income or self-employment tax.
- You almost certainly must make estimated tax payments if you’re a business owner who predicts they will owe taxes exceeding $1000. Those filing as corporations generally have to pay for any amount exceeding $500.
- Salaried and waged employees can avoid paying estimated tax by asking their bosses to withhold a bit of their paycheck. This will require the filing of a special form, W-4.
- If you’re coming off a full tax year, you have been a U.S. citizen for at least 12 months and you had no tax liability in that time then you won’t have to pay estimated tax.
Though some of us will be exempt from paying estimated taxes, many of us will not be so lucky. If you run a business for example your chances of avoiding the tax are very low. Don’t run the risk of going into the process of filing your estimated taxes unprepared. Those who give too little can face serious legal ramifications. To err is human, but that doesn’t make it any more safe to do. Luckily, AFS Taxsavers will not err. We’ll make sure that you pay the perfect amount for your estimated taxes, that your forms are filled out perfectly and that you will not be at all liable for any reason. Call us today, and gain the security of having real experts on your side.