To listen to the podcast version of memo click here —> Podcast Version
This memo is for my self-employed clients and colleagues. Many of you don’t know that you need to pay quarterly estimated taxes if you don’t have withholding on a W2 as employees do.
But this memo is also for the many W2 taxpayers who also pay estimates due to high other income, such as capital gains, social security, interest, dividends, etc. that they don’t have withholding on.
Do you usually owe taxes when you file your tax returns? Then this memo is for you as well.
Here is a quick example. Let’s say you are a self-employed real estate agent, and in 2018 your total federal taxes were $10,000. As a self-employed independent contractor, you don’t have any withholding on a W2 in 2019. The IRS rules state that you need to make four equal estimated payments, each in the amount of $2,500, for 2019, which total that same 2018 amount, or $10,000.
And those would be due April 15th 2019, June 15th 2019, September 15th 2019 and January 15th 2020.
If you don’t pay estimated taxes quarterly, then you are putting yourself at serious risk for being assessed late payment penalties when you eventually do pay your taxes.
Remember, that taxes are not due on April 15th, especially when you’re self-employed. You must pay quarterly estimated taxes evenly throughout the year.
So January 15th 2020, which happens to be tomorrow, is the last possible day that you can make an estimated tax payment on-time for 2019 income taxes.
If you are self-employed, and have not made any 2019 estimated income tax payments, I urge you to contact me right away on 732-673-0510. There is still time to calculate an estimated tax payment for you, for both Federal taxes due and State taxes due, and get them paid in before midnight tomorrow, January 15th 2020.
Questions? Concerns? Call me on (732) 673-0510.
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Please reach out to me without hesitation with any tax, business or accounting question, and to schedule a consultation.
Tax Laws are complex.
It is very easy to make mistakes that can incur penalties.
Do you have a Tax, Accounting or Business Question?
Call Me Immediately. (732) 673-0510.
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Remember,
“If We Aren’t Working For You, Then You Aren’t Working At Your Best”
Chris Whalen, CPA
(732) 673-0510
81 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com
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