Phoenix Tax Prep | Withholding
Employees will usually have withholding taken out of their paychecks. If you don’t have any income taxes withheld or if you don’t have enough income tax withheld, then you may need to make estimated income tax payments. Self-employed tax payers normally have to pay their taxes this way since they do not receive a paycheck. Here are a few tips about making income tax estimates.
- You should make estimated tax payments if you expect to owe more than $1,000 when you file your income tax returns. Special returns apply to farmers and fisherman.
- You should begin by estimating the amount of income you expect to receive for the entire year. Also make sure you factor in any tax deductions and credits that you might be eligible to claim.
- Use form 1040-ES to figure and pay your estimated income tax.
- Certain situations, such as marital changes or the birth of a child, can affect your income tax liability. When these changes occur, you should revise your estimated tax payments during the year. If you are an employee, you may need to change the amount of income tax you are having withheld from your pay. If so, you should give your employee a new form W4, Employee’s Withholding Allowance Certificate. You can use the IRS Withholding Calculator tool to help you fill out the new form.
- There are multiple ways to pay your estimated income tax. You can pay online using IRS Direct Pay. Direct Pay is a secure service to pay you individual tax bill or to pay your estimated tax directly from your checking account at no cost to you. You could also mail a check along with form 1040-ES to the IRS.
If you have any questions or would like more information, feel free to contact us at Dusseau & Makris, PC, your Phoenix CPA firm.